Measuring area-level disadvantage in Australia : Development of a locally sensitive indicator

Background In Australia, the Socio-Economic Indexes for Areas (SEIFA), which includes the Index of Relative Socioeconomic Disadvantage (IRSD), captures the socioeconomic characteristics of areas. Because SEIFA rankings are relative to the country or state, the decile categorisations may not reflect an area’s socioeconomic standing relative to areas nearby.

Aims The aim of the research was to explore whether IRSD rankings could be re-ranked to become locally sensitive.

Data and methods Using existing SEIFA data to redistribute the membership of current decile IRSD groups, we tested three methods to re-rank all SA1 areas relative to the nearest areas capped at: (1) the nearest 99 neighbours, (2) a population threshold of 50,000 (3) a distance threshold of 10 km.

Results The reclassification of SEIFA IRSD deciles was largest (up to 8 decile points of change) when comparing the nearest neighbour and population threshold local methods to current state-based rankings. Moreover, compared to using current national and state SEIFA IRSD rankings, the use of local rankings resulted in more evenly distributed deciles between cities, regional, and remote areas.

Conclusions Because SEIFA IRSD rankings are used to allocate resources and health services, we encourage the combined use of a state and local ranking to refine areas considered the most disadvantaged.