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Tier 2 - Determinants of health

2.09 Index of disadvantage

Key facts

Why is it important?

There is a strong relationship between health and social determinants, such as low socioeconomic status, in Australia and other developed countries (Marmot M. 2015; Turrell & Mathers 2000). People of lower socioeconomic status tend to bear a significantly higher burden of disease (AIHW 2016). The links between different forms of socioeconomic disadvantage such as poverty, unemployment, poor education, social dysfunction, stress, social exclusion, racism and poor health are well established and documented (Marmot M. 2015; Paradies 2006; Sassi 2009; Saunders & Davidson 2007). The association between socioeconomic disadvantage and health can explain a substantial part of the health gap between Aboriginal and Torres Strait Islander people and non-Indigenous Australians (Booth & Carroll 2008).

That said, for many Indigenous Australians, their culture, community and history also plays a fundamental part in their health and wellbeing. As Professor Ngiare Brown stated:

We represent the oldest continuous culture in the world, we are also diverse and have managed to persevere despite the odds because of our adaptability, our survival skills and because we represent an evolving cultural spectrum inclusive of traditional and contemporary practices. At our best, we bring our traditional principles and practices— respect, generosity, collective benefit, and collective ownership— to our daily expression of our identity and culture in a contemporary context. When we are empowered to do this, and where systems facilitate this reclamation, protection and promotion, we are healthy, well and successful and our communities thrive (Brown 2012).

Therefore, the index of disadvantage only reflects some aspects of the wellbeing for Indigenous Australians.

Socioeconomic indexes bring together a composite measure of advantage and disadvantage status and provides a broad basis for tracking progress in addressing Indigenous disadvantage across the spectrum of determinants of health.

Data findings

Socio-Economic Indexes for Areas

The Australian Bureau of Statistics Socio-Economic Indexes for Areas (SEIFA) ranks areas from most disadvantaged to most advantaged.

In 2016, Indigenous Australians were over-represented in areas ranked as the most disadvantaged quintiles by the SEIFA and under-represented in the other areas. Close to 5 out of 10 Indigenous Australians (47%) lived in areas ranked in the most disadvantaged quintile (the lowest-ranked 20% of areas), compared with fewer than 2 in 10 (18%) non-Indigenous Australians. Close to 1 in 20 (5.1%) lived in areas ranked in the most advantaged quintile (the highest-ranked 20% of areas), compared with 4 in 20 (22%) non-Indigenous Australians (Table D2.09.2, Figure 2.09.1).

Figure 2.09.1: Population distribution by SEIFA advantage/disadvantage decile, by Indigenous status, 2016

This bar chart shows that 47% of Indigenous Australians were in the most disadvantaged quintile, compared with 18% for non-Indigenous; 5% of Indigenous Australians were in the most advantaged quintile, compared with 22% for non-Indigenous;

Source: Table D2.09.2. AIHW and ABS analysis of Census of Population and Housing 2016.

In all states and territories in 2016, a greater proportion of the Indigenous Australian population lived in the most disadvantaged quintile compared with non-Indigenous Australians. The highest proportion of Indigenous Australians living in areas in the most disadvantaged quintile (the lowest-ranked 20% of areas) was the Northern Territory (66%), which was 10 times the rate of non-Indigenous Australians (6.7%). The Australian Capital Territory had the highest proportion of Indigenous Australians (36%) who lived in areas in the most advantaged quintile in the country, and the lowest was in Tasmania (1.3%) (Table D2.09.2, Figure 2.09.2).

Figure 2.09.2: Population distribution by SEIFA advantage/disadvantage quintile, Indigenous population, by jurisdiction, 2016

This stacked bar chart shows that, in the Northern Territory, 66% of Indigenous Australians were in the most disadvantaged income quintile and 3% were in the most advantaged quintile. The proportion of Indigenous Australians in the most disadvantage quintile ranged from 34% in Victoria to 55% in South Australia, while in the Australian Capital Territory 1.4% were in the most disadvantaged quintile and 36% were in the most advantaged.

Note: Columns may not sum to 100% because not all Census responses could be allocated an index score.

Source: Table D2.09.2. AIHW and ABS analysis of Census of Population and Housing 2016.

Comparable data was also collected in the 2011 Census of Population and Housing. Between 2011 and 2016, there was a 4.9 percentage point decrease in the proportion of Indigenous Australians living in the most disadvantaged quintile (51.6% compared with 46.7%). Across this period, the proportion living in the other four quintiles increased slightly, from between 0.4 to 0.9 percentage points. By jurisdiction, the greatest reduction to the proportion of Indigenous Australians living in the most disadvantaged quintile was in the Northern Territory (7.6 percentage points), followed by New South Wales (6.8 percentage points). The greatest increase for the proportion of those living in the most advantaged quintile was in Victoria (2.3 percentage points) (AHMAC 2017) (Table D2.09.2, HPF 2017 Table 2.09.2).

These results should be interpreted carefully. Indigenous residents often represent a small proportion of an area’s total population, and therefore the socioeconomic status of that area as a whole will not always reflect the socioeconomic status of its Indigenous residents (the ‘ecological fallacy’). One study found that Indigenous Australians consistently had a lower socioeconomic status than the SEIFA score for their area (Kennedy & Firman 2004).

Socioeconomic outcome indexes for Indigenous Australians

Biddle (Biddle 2009, 2013) has constructed  several socioeconomic outcome indexes specifically for Indigenous Australians, based on data from the 2001, 2006 and 2011 censuses. These studies have consistently found a clear gradient of disadvantage by remoteness for Indigenous Australians. Capital city regions rank relatively well, while remote regions rank relatively poorly. Income, employment and education correlate geographically. Other measures of wellbeing show more complex patterns.

Within each region there is substantial variation across the smaller, underlying Indigenous areas. For example, although Sydney was the highest ranking Indigenous Area in all of Australia in 2006, the Indigenous Australian populations in areas such as Blacktown and Campbelltown had outcomes that were closer to those found in Remote Australia. Similar variation was found across Remote Indigenous areas, demonstrating that any geographic strategy for addressing Indigenous disadvantage must be targeted below the regional level (Biddle 2009).

Biddle’s (Biddle 2013) analysis based on the 2011 Census also found that in every location type, the Indigenous Australian population had higher levels of socioeconomic disadvantage than the non-Indigenous population. The gap between the two populations was smallest in city and regional rural areas (37–38 percentage points) and highest in Indigenous towns (89 percentage points) and remote dispersed settlements (81 percentage points).

Biddle (Biddle 2013) found that, over time, the ranking for most Indigenous areas remained similar. City areas, large regional towns and remote towns remained relatively stable. Over time there was a relative worsening of outcomes in small regional towns and rural areas and a relative improvement in Indigenous towns and remote dispersed settlements.

Research and evaluation findings

The relationship between socioeconomic status and health outcomes is typically characterised by poorer health for those of lower socioeconomic status—that is, health outcomes follow a social gradient. People with greater socioeconomic disadvantage will tend to have poorer health than those with lesser socioeconomic disadvantage (Adler & Stewart 2010; Keating & Hertzman 1999; Shepherd et al. 2012). This pattern exists across many countries, among different societies, across history, and extends to most measurable socioeconomic variables (such as poverty, employment, occupational status, education, housing and income) and across a range of health outcomes (including most aspects of physical and mental health) (Adler et al. 1994; Bhattacharya et al. 2013; Keating & Hertzman 1999; Marmot Michael & Wilkinson 2005; Shepherd et al. 2012).

The research literature also shows evidence of socioeconomic status disparities among Indigenous Australians. Education, location, discrimination, health, disability, labour market discrimination and social norms all play a role in explaining disadvantage with no single factor dominating (Biddle 2015). Socioeconomic variables (such as weekly cash income, source of cash income and completed years of schooling) have been found to explain between one-third and one-half of the gap in self-assessed health status between Indigenous and non‑Indigenous Australians (Booth & Carroll 2008).

It is estimated that in the Northern Territory, socioeconomic status contributes between 30 to 50% of the gap in life expectancy between Indigenous and non-Indigenous Australians (Zhao et al. 2013).

The relationship between low socioeconomic status and health also exists in reverse. Poor health is a contributor to poor socioeconomic circumstances (Bhattacharya et al. 2013). A study in Australia found that people with serious chronic illnesses, and their carers, faced greater financial stress (Jeon et al. 2009).


This summary measure supplements what is known and reported in other measures about the relative disadvantage that Indigenous Australians experience across a wide spectrum of social and economic issues. Disaggregating data by socioeconomic status and by region across health and social outcomes, where the data allows, will help identify in which there is a high need. This will assist in addressing the broader social determinants to improve health outcomes and guide future policy responses.

(See measures 2.04 Literacy and numeracy, 2.05 Education outcomes for young people, 2.06 Education participation and attainment of adults, 2.07 Employment, and 2.08 Income).

The policy context is at Policies and strategies.


  • Adler NE, Boyce T, Chesney MA, Cohen S, Folkman S, Kahn RL et al. 1994. Socioeconomic status and health: the challenge of the gradient. American psychologist 49:15.
  • Adler NE & Stewart J 2010. Health disparities across the lifespan: meaning, methods, and mechanisms. Annals of the New York Academy of Sciences 1186:5-23.
  • AHMAC (Australian Health Ministers’ Advisory Council) 2017. Aboriginal and Torres Strait Islander Health Performance Framework Report 2017. Canberra: AHMAC.
  • AIHW (Australian Institute of Health and Welfare) 2016. Australian Burden of Disease Study 2011: impact and causes of illness and death in Aboriginal and Torres Strait Islander people 2011. Canberra: AIHW.
  • Bhattacharya J, Hyde T & Tu P 2013. Health economics. Macmillan International Higher Education.
  • Biddle N 2009. Ranking regions: Revisiting an index of relative Indigenous socioeconomic outcomes, Centre for Aboriginal Economic Policy Research, Australian National University, CAEPR Working Paper, no. 50/2009. Canberra: CAEPR.
  • Biddle N 2013. CAEPR Indigenous Population Project 2011 Census Papers, Centre for Aboriginal Economic Policy Research, Australian National University, Socioeconomic Outcomes, Paper 13. Canberra: CAEPR.
  • Biddle N 2015. Entrenched Disadvantage in Indigenous Communities. In: Australia Centre for Economic Developement of Australia (ed.). Addressing Entrenched Disadvantage in Australia,. Melbourne: CEDA, 63-80.
  • Booth AL & Carroll N 2008. Economic status and the Indigenous/non-Indigenous health gap. Economics Letters 99:604-6.
  • Brown N 2012. Pacific Caucus Intervention to the 12th Session of the United Nations Permanent Forum on Indigenous Issues. New York: United Nations.
  • Jeon Y-H, Essue B, Jan S, Wells R & Whitworth JA 2009. Economic hardship associated with managing chronic illness: a qualitative inquiry. BMC health services research 9:182.
  • Keating DP & Hertzman C 1999. Modernity’s paradox. Developmental health and the wealth of nations:1-17.
  • Kennedy B & Firman D 2004. Indigenous SIFA- Revealing the ecological fallacy. Population and society: issues, research, policy. (ed., Australian Population Association). Canberra: APA.
  • Marmot M 2015. The Health Gap: The Challenge of an Unequal World Great Britain: Bloomsbury Publishing
  • Marmot M & Wilkinson R 2005. Social determinants of health. OUP Oxford.
  • Paradies Y 2006. A review of psychosocial stress and chronic disease for 4th world indigenous peoples and African Americans. Ethnicity & Disease 16:295-308.
  • Sassi F 2009. Health inequalities: a persistent problem. In: Hills J, Sefton T & Stewart K (eds). Towards a more equal society. Bristol: The Policy Press, 135–56.
  • Saunders P & Davidson P 2007. Rising poverty is bad for our health. The Medical Journal of Australia 187:530-1.
  • Shepherd CC, Li J & Zubrick SR 2012. Social gradients in the health of Indigenous Australians. American journal of public health 102:107-17.
  • Turrell G & Mathers CD 2000. Socioeconomic status and health in Australia. The Medical Journal of Australia 172:434-8.
  • Zhao Y, You J, Wright J, Guthridge SL & Lee AH 2013. Health inequity in the Northern Territory, Australia. International Journal for Equity in Health 12:79-.

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