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Estimating Small-Area Income Deprivation: An Iterative Proportional Fitting Approach

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Spatial Microsimulation: A Reference Guide for Users

Part of the book series: Understanding Population Trends and Processes ((UPTA,volume 6))

Abstract

Small-area estimation, in particular the estimation of small-area income deprivation, has potential value in the development of new or alternative components of multiple deprivation indices. These new approaches enable the development of income distribution threshold-based measures of income deprivation as opposed to benefit count-based measures of income deprivation and so enable the alignment of regional and national measures such as the Households Below Average Income with small-area measures. This chapter briefly reviews a number of approaches to small-area estimation before describing in some detail an iterative proportional fitting based spatial microsimulation approach. This approach is then applied to the estimation of small-area HBAI rates at the small-area level in Wales in 2003–2005. This chapter discusses the results of this approach, contrasts them with contemporary ‘official’ income deprivation measures for the same areas and describes a range of ways to assess the robustness of the results.

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Notes

  1. 1.

    See http://www.statistics.gov.uk/geography/gor.asp, mean size c 2 million households.

  2. 2.

    The second level of census aggregation (containing multiple census ‘output areas’) containing on average around 600 households.

  3. 3.

    Administrative areas that are nested within local authorities and which are exact aggregates of, on average, five LSOAs.

  4. 4.

    Modified OECD scale  =  1  +  0.5  ×  number of adults  +  0.2  ×  number of dependent children  <  14; HBAI scale (BHC)  =  0.67  ×  1 adult  +  0.33  ×  number of further adults  +  0.2  ×  number of children aged  <  14; HBAI scale (AHC)  =  0.58  ×  1 adult  +  0.42  ×  number of further adults  +  0.2  ×  number of children aged  <  14.

  5. 5.

    Somewhat counter intuitively, this means their WIMD 2005 income score would be low (i.e. not deprived).

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Acknowledgements

This work is based on data provided through EDINA UKBORDERS with the support of the ESRC and JISC and uses boundary material which is copyright of the crown and the post office.

Census data was originally created and funded by the Office for National Statistics and was distributed by the Census Dissemination Unit, MIMAS (University of Manchester). Census output is crown copyright and is reproduced with the permission of the controller of HMSO.

The FRS is collected and sponsored by the Department for Work and Pensions and is distributed by the UK Data Archive, University of Essex, Colchester. FRS data is copyright and is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland.

The WIMD 2004 was constructed by the Social Disadvantage Research Centre at the Department of Social Policy and Social Research at the University of Oxford and distributed by the Welsh Assembly Government.

We would also like to thank Professor Holly Sutherland (ISER, University of Essex) for advice on the treatment of negative income and housing costs.

This work was sponsored by the Welsh Assembly Government.

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Authors and Affiliations

  1. Centre for Research in Economic Sociology and Innovation, Department of Sociology, University of Essex, Colchester, UK

    Ben Anderson

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  1. Ben Anderson
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Correspondence to Ben Anderson .

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  1. , University of Canberra, NATSEM, University Drive South, Canberra, 2601, Aust Capital Terr, Australia

    Robert Tanton

  2. , Centre for Sports Medicine, University of Nottingham, C Floor, West Block Queen's Medical Centre, Nottingham, NG7 2UH, United Kingdom

    Kimberley Edwards

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Anderson, B. (2012). Estimating Small-Area Income Deprivation: An Iterative Proportional Fitting Approach. In: Tanton, R., Edwards, K. (eds) Spatial Microsimulation: A Reference Guide for Users. Understanding Population Trends and Processes, vol 6. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-4623-7_4

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