DEFINITIONS AND EXPLANATIONS

Population coverage. This report includes the civilian noninstitutional population of the United States and members of the Armed Forces in the United States living off post or with their families on post, but excludes all other members of the Armed Forces. Unrelated individuals under 15 years old are also excluded.

Farm-nonfarm residence. The farm population refers to rural residents living on farms. Beginning with the March 1980 survey, the CPS has employed a different definition of a farm than used in past Current Population Surveys or decennial censuses before 1980. Under the new definition, as used in the 1974 Census of Agriculture, a farm is any place in rural territory from which $1,000 or more of agricultural products were sold in the reporting year. All other households were classified as nonfarm, which comprises persons living in urban areas and persons not on farms living in rural areas. Rural persons in institutions, motels, and tourist camps, and those living on rented places where no land is used for farming are classified as nonfarm population. The new definition and its impact on the size and composition of the farm population are discussed in Current Population Reports, Series P-27, No. 52.

According to the old definition, farm residence was determined by responses to two questions: (1) "Does this place you (own/rent) have 10 acres or more?" and (2) "During the past 12 months, how much did sales of crops, livestock and other farm products from this place amount to (under $50, $50 to $249, $250 to $999, or $1,000 or more)?" The household was classified as being in the farm population if either (a) the acreage response was "yes" and sales amounted to $50 or more or (b) the acreage response was "no" and sales amounted to $250 or more.

The method of determining farm residence in Current Population Surveys prior to 1960 was to ask the question, "Is this house on a farm (or ranch)?" All persons living on farms as determined by the answer to the question constituted the farm population. However, persons on "farms" who paid cash rent for a house and yard only were classified as nonfarm, and, as in the present definition, all rural persons in institutions, motels, and tourist camps were classified as

Metropolitan areas. The population residing in metropolitan statistical areas (MSA's) as defined in June 1984 constitutes the metropolitan population. MSA's are defined by the Office of Management and Budget for use in the presentation of statistics by agencies of the Federal Government. An MSA is a geographic area consisting of a large population nucleus, together with adjacent communities which have a high degree of economic and social integration with that nucleus. The definitions specify a boundary around each large city so as to include most or all its suburbs. Entire counties form the MSA building blocks, except in New England where cities and towns are used. The former term SMSA was changed to MSA in 1983.

An area qualifies for recognition as an MSA if (1) it includes a city of at least 50,000 population, or (2) it includes a Census Bureau-defined urbanized area of at least 50,000 with a total metropolitan population of at least 100,000 (75,000 in New England). In addition to the county containing the main city or urbanized area, an MSA may include other counties having strong commuting ties to the central county. If specified conditions are met, certain large MSA's are designated as consolidated MSA's (CMSA's) and divided into component primary MSA's (PMSA's).

Nonmetropolitan areas. The territory outside metropolitan statistical areas is referred to here as nonmetropolitan.

Central cities. The largest city in each MSA is always designated a central city. There may be additional central cities if specified requirements, designed to identify places of central character within the MSA, are met. Although the largest central cities are generally included in the title of the MSA, there may be central cities that are not part of the title. The balance of the MSA outside the central city or cities often is regarded as equivalent to "suburbs."

Outside central cities. The territory outside central cities of metropolitan statistical areas but within MSA's is referred to here as outside central cities.

Geographic regions. The four major regions of the United States for which data are presented in this

Northeast: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.

Midwest: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

South: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada New Mexico, Oregon, Utah, Washington, and Wyoming.

North and West: Northeast, Midwest, and West Regions combined.

Poverty areas. For this report poverty areas are defined in terms of census tracts (in metropolitan areas) or minor civil divisions (townships, districts, etc. in nonmetropolitan areas) in which 20 percent or more of the population was below the poverty level in 1979 based on the 1980 census. See 1980 Census of Population report PC80-2-8D, Poverty Areas in Large Cities.

Tenure. A housing unit is "owner occupied" if the owner or co-owner lives in the unit, even if it is mortgaged or not fully paid for. A cooperative or condominium unit is "owner occupied" only if the owner or co-owner lives in it. All other occupied units are classified as "renter occupied," including units rented for cash rent and those occupied without payment of cash rent. For renter-occupied units, information was also obtained as to whether the unit was publicly owned or subsidized by the Federal, State, or local government.

Income. For each person in the sample 15 years old and over, questions were asked on the amount of money income received in the preceding calendar year from each of the following sources: (1) money wages or salary; (2) net income from nonfarm selfemployment; (3) net income from farm self-employment; (4) Social Security or railroad retirement; (5) Supplemental Security income; (6) public assistance or welfare payments; (7) interest (on savings or other investments which pay interest); (8) dividends, income from estates or trusts, or net rental income; (9) veterans' payments or unemployment and worker's compensation; (10) private pensions or government employee pensions; (11) alimony or child support, regular contributions from persons not living in the household, and other periodic income.

It should be noted that although the income statistics refer to receipts during the preceding year the characteristics of the person, such as age, and labor force status, and the composition of families refer to the time of the survey. The income of the family does not include amounts received by persons who were members of the family during all or part of the income year if these persons no longer resided with the family at the time of enumeration. However, family income includes amounts reported by related persons who did not reside with the family during the income year but who were members of the family at the time of enumeration.

Data on consumer income collected in the CPS by the Bureau of the Census cover money income received (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, Social Security, union dues, Medicare deductions, etc. Therefore, money income does not reflect the fact that some families receive part of their income in the form of noncash benefits such as food stamps, health benefits, and subsidized housing; that some farm families receive noncash benefits in the form of rentfree housing and goods produced and consumed on the farm; or that noncash benefits are also received by some nonfarm residents which often take the form of the use of business transportation and facilities, full or partial payments by business for retirement programs, medical and educational expenses, etc. These elements should be considered when comparing income levels. Moreover, readers should be aware that for many different reasons there is a tendency in household surveys for respondents to underreport their income. From an analysis of independently derived income estimates, it has been determined that income earned from wages or salaries is much better reported than other sources of income, and is nearly equal to independent estimates of aggregate income.

The various sources for which income is reported are defined as follows:

Money wages or salary is total money earnings received for work performed as an employee during the income year. It includes wages, salary, Armed Forces pay, commissions, tips, piece-rate payments, and cash bonuses earned, before deductions were made for taxes, bonds, pensions, union dues, etc.

Net income from nonfarm self-employment is net money income (gross receipts minus expenses) from one's own business, professional enterprise, or partnership. Gross receipts include the value of all goods sold and services rendered. Expenses include costs of goods purchased, rent, heat, light, power, depreciation charges, wages and salaries paid, business taxes (not personal income taxes), etc. In general, inventory changes were considered in determining net income; replies based on income tax returns or other official records do reflect inventory changes. However, when

values of inventory changes were not reported, net income figures exclusive of inventory changes were accepted. The value of saleable merchandise consumed by the proprietors of retail stores is not included as part of net income.

Net income from farm self-employment is net money income (gross receipts minus operating expenses) from the operation of a farm by a person on his own account, as an owner, renter, or sharecropper. Gross receipts include the value of all products sold, government farm programs, money received from the rental of farm equipment to others, and incidental receipts from the sale of wood, sand, gravel, etc. Operating expenses include cost of feed, fertilizer, seed, and other farming supplies, cash wages paid to farmhands, depreciation charges, cash rent, interest on farm mortgages, farm building repairs, farm taxes (not State and Federal personal income taxes), etc. The value of fuel, food, or other farm products used for family living is not included as part of net income. In general, inventory changes were considered in determining net income only when they were accounted for in replies based on income tax returns or other official records which reflect inventory changes; otherwise inventory changes were not taken into account.

Social Security includes Social Security pensions and survivors' benefits, and permanent disability insurance payments made by the Social Security Administration prior to deductions for medical insurance and railroad retirement insurance checks from the U.S. Government. Medicare reimbursements are not included.

Supplemental Security income includes payments made by Federal, State, and local welfare agencies to low income persons who are (1) aged (65 years old or over), (2) blind, or (3) disabled.

Public assistance or welfare payments include public assistance payments, such as aid to families with dependent children and general assistance.

Dividends, interest (on savings or other investments which pay interest), income from estates or trusts, net rental income, or royalties include dividends from stockholdings or membership in associations, interest on savings or any type of investment which pays interest, periodic receipts from estates or trust funds, net income from rental of a house, store, or other property to others, receipts from boarders or lodgers, and net royalties.

Unemployment compensation, veterans' payments, or worker's compensation include (1) unemployment compensation received from government unemployment insurance agencies or private companies during periods of unemployment and any strike benefits received from union funds; (2) money paid periodically by the Veterans Administration to disabled members of the Armed Forces or to survivors of deceased veterans, subsistence allowances paid to veterans for

"refunds" paid to ex-servicemen as GI insurance premiums; and (3) worker's compensation received periodically from public or private insurance companies for injuries incurred at work. The cost of this insurance must have been paid by the employer and not by the person.

Private and government employee pensions include (1) private pensions or retirement benefits paid to a retired person or his survivors by a former employer or by a union, either directly or through an insurance company and (2) government employee pensions received from retirement pensions paid by Federal, State, county, or other governmental agencies to former employees (including members of the Armed Forces) or their survivors.

Annuities, alimony, regular contributions from persons not living in the household, and other periodic income include (1) periodic receipts from annuities or insurance; (2) alimony and child support; (3) contributions received periodically from persons not living in the household; (4) other periodic income such as military family allotments, net gambling winnings, and other kinds of periodic income other than earnings. Government transfer payments include Social Security or railroad retirement, public assistance or welfare payments, Supplemental Security income, retirement and annuities, veterans' payments, and unemployment and worker's compensation.

Receipts not counted as income are receipts from the following sources were not included as income: (1) money received from the sale of property, such as stocks, bonds, a house, or a car (unless the person was engaged in the business of selling such property, in which case the net proceeds would be counted as income from self-employment); (2) withdrawals of bank deposits; (3) money borrowed; (4) tax refunds; (5) gifts; and (6) lump-sum inheritances or insurance payments.

All sources of income may be combined into two major types:

Total money earnings. The algebraic sum of money wages or salary and net income from farm and nonfarm

Income other than earnings. The algebraic sum of all sources of money income except wages and salaries and income from self-employment.

Total money income. This is defined as the algebraic sum of money wages and salaries, net income from self-employment, and income other than earnings. The total income of a family is the algebraic sum of the amounts received by all income recipients in the family.

The income tables for families and unrelated individuals include in the lowest income group those who were classified as having no income in the income