Computing the 2006 - 2007 State Standard Quality Update Factor - Klickitat County, WA

The unadjusted 2006 to 2007 update factor is calculated as the ratio of the 2007 ACS standard quality median rent to the 2006 ACS standard quality median rent for Washington. Following calculation of the unadjusted update factor, HUD determines if the change in the standard quality rent between the 2006 and 2007 surveys is statistically significant. If the change is not statistically significant, HUD sets the update factor to 1.0. The 2006 - 2007 unadjusted update factor of 1.0325 is:

= 2007 ACS Standard Quality Public Housing Adjusted Median Rent / 2006 ACS Standard Quality Public Housing Adjusted Median Rent

= $827 /

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New for Final FY 2010 FMRs, HUD tests to see if the change in ACS survey results from 2006 to 2007 is statistically significant. This is done by computing a "Z-Score". If the Z-Score value is greater than 1.645 the 2 survey results are considered to statistically different from each other. If the Z-Score is less than 1.645 then the change as measured by the two surveys is considered to be statistically insignificant and the change factor is set to 1.0

The Z-Score is calculated as:

ABS(EST₀₇ - EST₀₆)

(SE₀₇^² + SE₀₆^²)

Where EST₀₆ is the 2006 ACS Survey Estimate, EST₀₇ is the 2007 ACS Survey Estimate, SE₀₆ is the standard error of the 2006 ACS Survey Estimate and SE₀₇ is the standard error of the 2007 ACS Survey Estimate.

ABS(827 - )

(4.863^² + 5.471^²)

(23.651 + 29.933)

53.584

7.320

Z = 7.320

As can be seen from the calculation above the z-score is greater than 1.645. Therefore the 2006 to 2007 update factor is 1.0325.

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The difference between the actual 2006 - 2007 update factor of 1.0325 and the demonstration update factor of computed here is due to the effects of computational rounding and the use of the rounding performed on the public distributions as described above.

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