Convinced the U.S. Census Bureau has long underestimated Miami's population and income levels -- discouraging retailers, banks and supermarkets from opening shop in the city -- Mayor Manny Diaz's administration commissioned an in-depth study that confirms the existence of a substantial gap.

How large? Try 65,000 people missing from the 2008 Census population estimates, a sum that would bring the city population to a record 480,000. In addition, the study said traditional Census-based market estimates missed a whopping $1.3 billion in residents' income.

Armed with the study, to be formally released Monday and conducted by respected nonprofit research group Social Compact, the city has filed an official challenge of the 2008 population estimate with the Census Bureau. City officials also hope to use the study to persuade retailers, supermarket operators and banks to open stores and branches and invest in city neighborhoods, in particular commercially underserved areas such as Liberty City and Allapattah.

Because the term-limited Diaz leaves office next month, though, that job would fall to his successor. Social Compact, whose research has been partially underwritten by the John S. and James L. Knight Foundation, will continue working with the city for another year.

``It would behoove whoever follows the mayor to immerse themselves in this,'' said Diaz's chief of staff, Javier Fernandez. ``It has myriad uses.''

The study's neighborhood-by-neighborhood assessments show tens of millions of dollars in spending power that goes unrecognized by retailers, ranging from nearly $50 million annually along the Coral Way corridor to $18 million in Overtown. Analysis of buying patterns show residents of those areas are spending that much on basic retail needs in other neighborhoods or outside the city because they lack nearby shops and grocery stores.

Social Compact's analysis found total annual income in the city to be $9.1 billion, compared with $7.8 billion derived by traditional market estimates.

``We're trying to find the missing market opportunities,'' said Social Compact President John Talmage. ``It's a substantial amount of money.''

Part of the explanation for the income undercount, according to the study: About 9 percent of city residents' annual earnings comes from the informal -- or cash -- economy. That means money earned in tips, baby-sitting, housekeeping or other work that is not reported to the government and not picked up on by traditional market studies, Talmage said.

Cash transactions are widespread in some neighborhoods in part because there are no accessible bank branches, Talmage said. In Liberty City, for instance, the study found that 83 percent of residents pay all their bills in cash.

Social Compact's findings could make a critical difference because developers, retailers and banks use population and purchasing power in calculating where to invest. Social Compact's numbers are derived from a ``drill-down'' methodology that combines dozens of wide-ranging data sources, including surveys, utility records, building permits and property records.

Because Census population figures also determine distribution of billions of dollars in federal funding, a big population miscount would also substantially shortchange the city. The U.S. Conference of Mayors puts that loss at $2,200 per person.

The Census issues annual population and income estimates based on surveys to update the decennial Census count. But the bureau acknowledges undercounts in hard-to-reach groups such as immigrants and racial and ethnic minorities. The bureau, in addition, has not taken into account thousands of new residents brought into the city by the development boom, Miami officials say. Talmage says that's because the bureau has trouble keeping abreast of households created by new construction.

The city's Census challenge is its second in a row. Last year, the Census Bureau upped Miami's 2007 population estimate to 424,000 after a challenge by the city. On Friday, Census Bureau officials told the city they believe the methodology in its newest challenge is sound, but they're still analyzing the population numbers.

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