Note on Adjusting Dollar Amount Variables for Inflation (CPI-U)

All dollar amounts in the IPUMS are nominal dollars--that is, they are given as measured in the original sample. However, inflation renders these dollar amounts not comparable: $1 in 2009, for example, is worth much less than $1 in 1962. The IPUMS variable CPI99 provides an easy way to adjust dollar amounts to constant dollars. This variable, constant within years, inflates or deflates dollar amounts to the amount they would have represented in 1999 (which corresponds to the 2000 CPS)--as shown in Table 1.

Table 1. Converting Dollar Amounts to Constant 1999 Dollars with CPI99
Data Year Income Year X CPI99 = 1999 dollars
1962 1961 dollars X 5.572 = 1999 dollars
1963 1962 dollars X 5.517 = 1999 dollars
1964 1963 dollars X 5.444 = 1999 dollars
1965 1964 dollars X 5.374 = 1999 dollars
1966 1965 dollars X 5.289 = 1999 dollars
1967 1966 dollars X 5.142 = 1999 dollars
1968 1967 dollars X 4.988 = 1999 dollars
1969 1968 dollars X 4.787 = 1999 dollars
1970 1969 dollars X 4.540 = 1999 dollars
1971 1970 dollars X 4.294 = 1999 dollars
1972 1971 dollars X 4.114 = 1999 dollars
1973 1972 dollars X 3.986 = 1999 dollars
1974 1973 dollars X 3.752 = 1999 dollars
1975 1974 dollars X 3.379 = 1999 dollars
1976 1975 dollars X 3.097 = 1999 dollars
1977 1976 dollars X 2.928 = 1999 dollars
1978 1977 dollars X 2.749 = 1999 dollars
1979 1978 dollars X 2.555 = 1999 dollars
1980 1979 dollars X 2.295 = 1999 dollars
1981 1980 dollars X 2.022 = 1999 dollars
1982 1981 dollars X 1.833 = 1999 dollars
1983 1982 dollars X 1.726 = 1999 dollars
1984 1983 dollars X 1.673 = 1999 dollars
1985 1984 dollars X 1.603 = 1999 dollars
1986 1985 dollars X 1.548 = 1999 dollars
1987 1986 dollars X 1.520 = 1999 dollars
1988 1987 dollars X 1.467 = 1999 dollars
1989 1988 dollars X 1.408 = 1999 dollars
1990 1989 dollars X 1.344 = 1999 dollars
1991 1990 dollars X 1.275 = 1999 dollars
1992 1991 dollars X 1.223 = 1999 dollars
1993 1992 dollars X 1.187 = 1999 dollars
1994 1993 dollars X 1.153 = 1999 dollars
1995 1994 dollars X 1.124 = 1999 dollars
1996 1995 dollars X 1.093 = 1999 dollars
1997 1996 dollars X 1.062 = 1999 dollars
1998 1997 dollars X 1.038 = 1999 dollars
1999 1998 dollars X 1.022 = 1999 dollars
2000 1999 dollars X 1.000 = 1999 dollars
2001 2000 dollars X 0.967 = 1999 dollars
2002 2001 dollars X 0.941 = 1999 dollars
2003 2002 dollars X 0.926 = 1999 dollars
2004 2003 dollars X 0.905 = 1999 dollars
2005 2004 dollars X 0.882 = 1999 dollars
2006 2005 dollars X 0.853 = 1999 dollars
2007 2006 dollars X 0.826 = 1999 dollars
2008 2007 dollars X 0.804 = 1999 dollars
2009 2008 dollars X 0.774 = 1999 dollars
2010 2009 dollars X 0.777 = 1999 dollars
2011 2010 dollars X 0.764 = 1999 dollars
2012 2011 dollars X 0.741 = 1999 dollars
2013 2012 dollars X 0.726 = 1999 dollars
2014 2013 dollars X 0.715 = 1999 dollars
2015 2014 dollars X 0.704 = 1999 dollars
2016 2015 dollars X 0.703 = 1999 dollars
2017 2016 dollars X 0.694 = 1999 dollars
2018 2017 dollars X 0.679 = 1999 dollars

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The 1999 base year was chosen simply for convenience; adjusting to some other year would yield identical correlations, regression coefficients, inequality measures, and the like. However, after using CPI99 to convert nominal dollars to 1999 dollars, users who desire another base year for simple descriptive statistics can easily adjust 1999 dollars to 1939 dollars, 1949 dollars, or any other year by making use of the alternate factors provided in Table 2.

Table 2. Converting Constant 1999 Dollars to Constant Dollars For Another Base Year
1999 dollars X Alternate Factor = Income Year Data Year
1999 dollars X 0.179 = 1961 dollars 1962
1999 dollars X 0.181 = 1962 dollars 1963
1999 dollars X 0.184 = 1963 dollars 1964
1999 dollars X 0.186 = 1964 dollars 1965
1999 dollars X 0.189 = 1965 dollars 1966
1999 dollars X 0.194 = 1966 dollars 1967
1999 dollars X 0.200 = 1967 dollars 1968
1999 dollars X 0.209 = 1968 dollars 1969
1999 dollars X 0.220 = 1969 dollars 1970
1999 dollars X 0.233 = 1970 dollars 1971
1999 dollars X 0.243 = 1971 dollars 1972
1999 dollars X 0.251 = 1972 dollars 1973
1999 dollars X 0.267 = 1973 dollars 1974
1999 dollars X 0.296 = 1974 dollars 1975
1999 dollars X 0.323 = 1975 dollars 1976
1999 dollars X 0.342 = 1976 dollars 1977
1999 dollars X 0.364 = 1977 dollars 1978
1999 dollars X 0.391 = 1978 dollars 1979
1999 dollars X 0.436 = 1979 dollars 1980
1999 dollars X 0.495 = 1980 dollars 1981
1999 dollars X 0.546 = 1981 dollars 1982
1999 dollars X 0.579 = 1982 dollars 1983
1999 dollars X 0.598 = 1983 dollars 1984
1999 dollars X 0.624 = 1984 dollars 1985
1999 dollars X 0.646 = 1985 dollars 1986
1999 dollars X 0.658 = 1986 dollars 1987
1999 dollars X 0.682 = 1987 dollars 1988
1999 dollars X 0.710 = 1988 dollars 1989
1999 dollars X 0.744 = 1989 dollars 1990
1999 dollars X 0.785 = 1990 dollars 1991
1999 dollars X 0.818 = 1991 dollars 1992
1999 dollars X 0.842 = 1992 dollars 1993
1999 dollars X 0.867 = 1993 dollars 1994
1999 dollars X 0.890 = 1994 dollars 1995
1999 dollars X 0.915 = 1995 dollars 1996
1999 dollars X 0.942 = 1996 dollars 1997
1999 dollars X 0.963 = 1997 dollars 1998
1999 dollars X 0.978 = 1998 dollars 1999
1999 dollars X 1.000 = 1999 dollars 2000
1999 dollars X 1.034 = 2000 dollars 2001
1999 dollars X 1.063 = 2001 dollars 2002
1999 dollars X 1.080 = 2002 dollars 2003
1999 dollars X 1.104 = 2003 dollars 2004
1999 dollars X 1.134 = 2004 dollars 2005
1999 dollars X 1.172 = 2005 dollars 2006
1999 dollars X 1.210 = 2006 dollars 2007
1999 dollars X 1.245 = 2007 dollars 2008
1999 dollars X 1.292 = 2008 dollars 2009
1999 dollars X 1.287 = 2009 dollars 2010
1999 dollars X 1.309 = 2010 dollars 2011
1999 dollars X 1.350 = 2011 dollars 2012
1999 dollars X 1.377 = 2012 dollars 2013
1999 dollars X 1.399 = 2013 dollars 2014
1999 dollars X 1.420 = 2014 dollars 2015
1999 dollars X 1.430 = 2015 dollars 2016
1999 dollars X 1.440 = 2016 dollars 2017
1999 dollars X 1.471 = 2017 dollars 2018

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For instance, consider the following dataset, where Inc99 = Income X CPI99:

Case Year Income CPI99 Inc99
1 1980 $33,000 2.295 $75,375
2 1980 $36,000 2.295 $82,620
3 1980 $42,000 2.295 $96,390
4 1990 $66,000 1.344 $88,704
5 1990 $72,000 1.344 $96,768
6 1990 $84,000 1.344 $112,896

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Expressed in 1999 dollars, the mean income in the 1980 data is $84,795, and the mean income in the 1990 data is $99,456, for a 17.3 percent increase ( (99,456 - 84,795)/84,795 = 0.173). But users may want to express mean incomes in terms of the final year of data (1990, or 1989 dollars). To do this, we find the alternate factor from the list above to convert 1999 dollars into 1989 dollars, which is 0.744. Then we can add a new variable for 1989 dollars (Inc89 = Inc99 X 0.744):

Case Year Income CPI99 Inc99 Inc89
1 1980 $33,000 2.295 $75,375 $56,079
2 1980 $36,000 2.295 $82,620 $61,469
3 1980 $42,000 2.295 $96,390 $71,714
4 1990 $66,000 1.344 $88,704 $65,996
5 1990 $72,000 1.344 $96,768 $71,995
6 1990 $84,000 1.344 $112,896 $83,995

Expressed in 1989 dollars, the mean income in the 1940 data is $63,087, and the mean income in the 1980 data is $73,995. There is still a 17.3 percent increase ( (73,995 - 63,087) / 63,087 = 0.173), but displaying the data this way may make more sense for certain purposes.

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