In the original PUMS data released by the Census Bureau, dollar amount variables are not adjusted for inflation. IPUMS adjusts dollar amount variables in the multiyear ACS samples to report values in constant dollars, adjusted to the last year of the multiyear file. For example, we adjust dollar amount variables in the 2019-2023 5-year ACS sample into 2023 dollars. I apologize for any confusion caused by the 2021 forum post you linked to. We will revise this post.
The Census Bureau provides an inflation adjustment factor for users to manually adjust dollar amount values for inflation. The variable for the adjustment factor is called ADJINC in the original PUMS data. The value of ADJINC is constant within single-year ACS data files, and within each single year of multi-year ACS data files (i.e., within each value of MULTYEAR). This adjustment factor makes adjustments to account for the rolling survey schedule of the ACS. In the multiyear files, it also adjusts dollar values to the final year. Because IPUMS automatically adjusts multiyear files to report dollars to the final year value, our version of the ADJINC variable (ADJUST) provides only the component that adjusts for the rolling survey schedule. This means that the IPUMS variable ADJUST and the original Census Bureau PUMS variable ADJINC will not match in the multi-year files. Note also that the IPUMS adjustments for inflation in the multiyear files do not include the adjustment for the rolling data collection of the ACS.
The ACS is conducted on a rolling basis throughout the year. The reference period for all income and earnings variables in the ACS is the previous 12 months. As a result, different respondents have different absolute reference periods for reporting their income and earnings. For example, someone surveyed in January 2023 reports income earned between January 2022 and December 2022, while someone surveyed in August 2023 reports income earned between August 2022 and July 2023. This means that income and earnings are a mix of calendar year dollars (income earned in the calendar year of the survey), and of dollars that need to be adjusted to be expressed in calendar year dollars.
Ideally, an adjustment factor to account for this rolling design would be unique to each month of data. However, month-specific adjustment factors would make it easier for individuals to be identified (month of survey is not in the public use data), so the Census Bureau does not provide them. Instead, the Census Bureau averages the twelve month-specific adjustment factors to create a single adjustment factor that is constant for all cases within each year of the ACS. Census Bureau documentation advises users to multiply all income and dollar amount variables by the ADJUST constant, which converts numbers into calendar year dollars. However, a constant adjustment factor cannot adjust dollar amounts to calendar-year dollars. Dollars earned during the previous year (as for January respondents) need to be adjusted the most; dollars earned mostly during the current year (as for December respondents) are essentially in calendar-year dollars already and need to be adjusted only slightly. Therefore, IPUMS does not apply the adjustment factor but does offer it as a stand-alone variable that users can apply manually if they wish.
See also information on our adjust monetary values (AMV) feature, which allows users to automatically adjust dollar amount variables to 2010 dollars as they create their data extract.