Multi-year ACS files and inflation adjustment

How is the inflation adjustment factor calculated for each observation in the multi-year ACS files?

IPUMS states that the multi-year ACS files include inflation-adjusted income variables. For example, the 2005-2007 file reports values in 2007 dollars. If a respondent to the 2006 survey reports income over the last 12 months, does the inflation adjustment capture the exact reporting period for that respondent?

Or is the same inflation factor used for every respondent to the 2006 survey in the multi-year file, even though respondents in 2006 report income over different months?

The inflation adjustment is actually performed by the Census Bureau when they create the multi-year files by combining the single year files. They use the all items CPI-U-RS Annual Averages. The single year files are actually adjusted as well, as you can read about in the Census Bureau’s ACS General Handbook. As you noted, ACS respondents use the previous 12 months as the reference period, the Census Bureau then adjusts dollar values to the value of the reporting year. This makes it possible to apply the same inflation factor to all respondents from a component year of a multiyear file.

I hope this helps.