Wednesday, Aug. 27, 2008

Experts doubt income increase actually happened in Merced County

Sampling error blamed in a study that says salaries jumped in county.

By J.N. SBRANTI
The Modesto Bee

Incomes soared in Merced County last year, far outpacing state and national gains, according to Census Bureau estimates released Tuesday, but those stats sound fishy to local analysts who suspect sampling errors.

The Census Bureau's 2007 American Community Survey showed that median family incomes jumped 9.2 percent in Merced County and 7.2 percent in Stanislaus County.

Compare that with the 4.5 percent family income gains for California and the country as a whole.

"There's something strange about these results," said Roy Childs, research director for University of the Pacific's Jacoby Center for Public Service and Civic Leadership.

Considering the region's declining economy, increasing unemployment and soaring foreclosure rates, Childs said, "it suggests there's some form of sampling error."

That's possible because the statistics come from a yearlong government "survey," not the once-a-decade, door-to-door canvas for which the census bureau is famous, he said.

The data released Tuesday offer statistics only for cities and counties with 65,000 residents or more.

"There's quite a big margin of error in this survey. That's very likely what's going on here," said Randy Svedbeck, research manager for the Stanislaus Economic Development & Workforce Alliance. "We kind of live or die by the statistics, but we know they're not perfect. It's hard to get perfect."

But it's easy to see something is amiss in this latest set of economic stats, he said.

"I don't know that anybody would understand (how that could happen)," Svedbeck said.

Census Bureau income statistician Chuck Nelson said the "numbers are right mathematically, but they're going to have a lot of sampling variability."

The bureau mails surveys to what is supposed to be a representative sample of homes. Recipients are required by law to answer all the questions. If they don't, census takers keep contacting residents -- by mail, telephone and in person -- until they complete the survey.

But if the house is vacant, the survey remains blank.

"Empty houses could have something to do with (the odd results)," Childs said.

About 20,000 homes have been foreclosed on in Merced, Stanislaus and San Joaquin counties in the past year, so surveys sent to those homes likely weren't completed.

Childs said many people who lost their homes to foreclosure have moved back to the Bay Area, where they now rent. That may partly explain why the Census Bureau's survey population estimates have declined.

Nelson cautioned against reading too much into year-to-year fluctuations in the income data. He noted that the survey is "kind of lagging" in its results because it goes out to residents at different times of the year, then the answers get averaged together.

Other sources of income data not yet made public, Nelson said, show that when inflation is taken into consideration Merced and Stanislaus county incomes "statistically did not change" between 2006 and 2007.

More inflation-adjusted income data will be released in December by the Census Bureau. Those figures will be based on American Community Survey results from 2005, 2006 and 2007. Those statistics will be provided for all cities with 20,000 or more residents.