Socio-economic indexes for areas: Getting a handle on individual diversity within areas

12 Sep 2011

This report summarises the socio-economic conditions of an area using relevant information from the Census of Population and Housing.

Socio-economic indexes for areas (SEIFA) seek to summarise the socio-economic conditions of an area using relevant information from the Census of Population and Housing.  The SEIFA indexes are widely used measures of relative socio-economic advantage and disadvantage at the Census Collector District level. 
The indexes provide contextual information about the area in which a person lives, but within any area there are likely to be individuals with different characteristics to the overall population of that area.  If inferences are made about these individuals based purely on the characteristics of the area in which they live, they could be misleading and there is potential for error in any conclusions – this is referred to as the ecological fallacy. 
Using 2006 Australian Census of Population and Housing data, this paper explores individual level diversity within areas by creating and analysing two person-based socio-economic indexes: one of relative disadvantage and the other of relative advantage and disadvantage.  The conceptual and methodological basis for these indexes was established by Baker and Adhikari (2007). 
The primary purpose of this paper is to illustrate how individual level index scores can be used to illustrate and measure the diversity of socio-economic advantage and disadvantage within area level SEIFA.  Secondary to this analysis of diversity, this paper serves to highlight the advantages of SEIFA when compared with individual level indexes of relative socio-economic advantage and disadvantage, including maximising the proportion of the population receiving an index score

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