How The Chronicle Calculated Generosity of State Residents

By HARVY LIPMAN

Figuring out how residents of one state compare in generosity with those of another is a complicated task because comprehensive data are not available. For its analysis, The Chronicle used data from the Internal Revenue Service’s Statistics of Income Bulletin for spring 2001, containing 1999 income-tax data. The bulletin provides state-by-state totals of the number of taxpayers who filed returns with itemized deductions, the number of returns, the adjusted gross income for all taxpayers, and the amount of charitable deductions. The statistics are broken into income categories, ranging from taxpayers with less than $20,000 in income to those with $1-million or more.

To calculate the percentage of itemizers’ income donated to charity, The Chronicle first divided the number of itemized returns by the total number of returns for each income category in each state. That provided the percentage of itemized returns. Multiplying that percentage times the total adjusted gross income for each income category provided an estimate of total income for those who itemized deductions.

To adjust the figures for variations in cost of living in different states, The Chronicle first used U.S. Census data to determine which localities in each state accounted for the most households in each income category. Then, using average cost-of-living data for each locality collected for the Yahoo Web site by MonsterDaata, a research company, The Chronicle calculated average basic living expenses (including housing, food, transportation, and other spending) for each income category in each state.

For example, in the $75,000-to-$100,000 income category, the average cost of living in California was $54,600; in South Dakota, it was $35,770. Those average cost figures were then multiplied by the number of itemizers in each state. That total was subtracted from the adjusted gross income in each income group, with the remainder being the amount of disposable income that state’s taxpayers had available.

That figure was then divided into the total amount of deductions to come up with the percentage given to charity.