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Suitability of a County-Level Income Definition for Analysis of Lower-Income Communities

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Abstract

This paper examines the costs and benefits of using a straightforward county-level income definition in the classification and study of lower-income communities. A definition based on population-weighted distribution of county-level median household incomes does a good job of identifying the most economically disadvantaged communities across a wide range of indicators. We show robustness to the use of different thresholds, levels of geography, and cost-of-living adjustments.

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  • Isabella Agnes & Ellie Dries & Jessica Liu & Zofsha Merchant & Fatimah Shaalan & Michelle Tran & Anna Tranfaglia & Erin Troland & Douglas A. Webber, 2025. "Suitability of a County-Level Income Definition for Analysis of Lower-Income Communities," Finance and Economics Discussion Series 2025-039, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2025-39
    DOI: 10.17016/FEDS.2025.039
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    JEL classification:

    • G50 - Financial Economics - - Household Finance - - - General
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General

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