The U.S. Census Bureau, with support from other Federal agencies, created the Small Area Income and Poverty Estimates (SAIPE) program to provide more current estimates of selected income and poverty statistics than the most recent decennial census. Estimates are created for states, counties, and school districts. The main objective of this program is to provide updated estimates of income and poverty statistics for the administration of federal programs and the allocation of federal funds to local jurisdictions. For example, the No Child Left Behind Act of 2001 directs the Department of Education to distribute Title I basic and concentration grants directly to school districts on the basis of the most recent estimates of children in poverty available from the Census Bureau (National Research Council, 2000). In addition to these federal programs, there are hundreds of state and local programs that depend on income and poverty estimates for distributing funds and managing programs. In this paper we focus on estimation of the number of poor school aged children (between the ages of 5 and 17) for every school district.