Income Inequality in Australia – Decomposing by City and Suburb

There has been an increasing interest in the level and change in income inequality across much of the developed world. In Australia, this research has extended our knowledge by using new measures (for example wealth), longer time periods, and income inequality dynamics. One area for which we have relatively little recent evidence is on the spatial distribution of income inequality, especially at small areas of geography. Specifically, we look at the level of income inequality for the eight Australian capital cities in 2006 and 2011 (using relevant Census and survey data), as well as inequality between and within suburbs within those capital cities. A number of interesting findings emerge from the analysis. The most obvious finding is that there are differences across cities in the extent to which income is unevenly distributed. While this has been demonstrated in previous research, we were able to use new data and new techniques to show that the type of income which one uses has a small but noticeable effect on the spatial distribution of inequality. Differences in household sizes and the tax system change how income inequality is spatially distributed.