Introductory Guide: Calculating a deprivation index using census data

Deprivation indexes have widespread use in academic research and in local and national government applications. It is useful for people to understand their construction and to be able to calculate their own measures. We provide an overview of the background to area based deprivation measures. We detail and explain a series of steps taken to calculate a deprivation index for small areas in Australia. We use data from Australia’s 2016 Census of Population and Housing for the SA2 level of geography. After defining the set of variables used as inputs, we emulate the steps taken to calculate other census based deprivation indexes. The resulting scheme correlates closely with an official, but more sophisticated deprivation measure, suggesting that simple schemes have utility.

There are choices to be made for input variables and for some of the detail of the calculations. Researchers can follow the steps we describe to develop their own measures.

The files we provide here will enable people to reproduce the deprivation measures in SPSS, R and Stata.