It is well known that many social and economic characteristics vary by location. Incomes are different in urban areas compared to remote areas; and house prices are higher in one part of a city compared to another. This spatial variation is essential to take into account when designing Government policy or conducting research, as it can affect service provision and will affect the results of any research done for a larger area.

NATSEM has developed a model that allows us to derive small area estimates of many characteristics that would not normally be available from other small area datasets like the Australian Census or administrative data. The technique also allows us to derive cross tabulations of different characteristics (so, for example, poverty by age group or poverty by housing tenure). The model also allows projections to be derived, using population projections from the ABS or State and Territory Governments; and projections of labour force status from the Commonwealth Treasury.

The spatial microsimulation method has been used to derive small area estimates of poverty by family type; poverty rates for single aged pensioners; and housing stress. The model has also been linked to NATSEM’s tax/transfer microsimulation model, allowing us to derive small area estimates of tax/transfer policy changes.

NATSEM researchers have substantial expertise on spatial microsimulation, and Associate Professor Robert Tanton is a recognised international leader in this technique, recently winning an Economic and Social Research Council grant to meet other experts on spatial microsimulation in the UK. Dr Yogi Vidyattama is also an expert on regional indicators and spatial microsimulation, and is on the board of the Australia New Zealand Regional Science Association International (ANZRSAI).

For more information about this model contact Rob Tanton on (02) 6201 2769