Since SIPP’s 2014 Panel, the business profit variables (TJB(n)_PRFTB) have been bottomcoded by calculating the mean profit values at and below the bottomcode.

Starting with 2019 SIPP, business profits are instead restricted at the bottomcode value. See the “2019 SIPP: Disclosure Methods to Better Align Poverty Rates” user note to learn more detail about reconciling internal and external poverty rates. In addition to the changes in the profits bottomcode, in 2019 SIPP users were provided more information above the profits topcode. Users that want to learn about the topcode changes can see the “2019 SIPP: Changes to Business Profits Topcoding” user note.

To calculate the bottomcode, we use internal variables (EJB(n)_PRFTB) that are not output on the public-use file. This internal variable contains the total profits earned at a self-employed job in the calendar year. EJB(n)_PRFTB differs from TJB(n)_PRFTB in that take-home wage and salary pay included in EJB(n)_PRFTB is subtracted from TJB(n)_PRFTB. Thus TJB(n)_PRFTB are a given job’s retained profits. As an equation:

TJB(n)_PRFTB = EJB(n)_PRFTB – the sum of TJB(n)_MSUM across all months in a job spell. 

This implies that not all bottomcoded respondents will have the same values for TJB(n)_PRFTB.

Users will also now have access to more data below the bottomcode. The variables TPRFTB_BMEAN, TPRFTB_BMED, and TPRFTB_BSTD give the mean, median, and standard deviation of EJB(n)_PRFTB below the bottomcode.  

Users wishing to implement a different bottomcode procedure can use the new variables. For example, if a user wished to use the mean below the bottomcode they would set

TJB(n)_PRFTB = TPRFTB_BMEAN – the sum of TJB(n)_MSUM across all months in a job spell.