Identifying Functional Regions in Australia Using Hierarchical Aggregation Techniques

This paper continues our work focused on developing a new socio-economic geography for Australia such that the chosen spatial aggregation of data is based on an analysis of economic behaviour. The underlying hypothesis is that the development of a geographical classification based on underlying economic behaviour will provide new insights into critical issues of regional performance, including unemployment differentials, the impact of industry, infrastructure and changes in local public expenditure on local labour markets. As a precursor to detailed work on the 2006 Census of Population and Housing data, we establish the proof of concept in this paper of the Intramax methodology using 2001 Journey-to-Work data from the Australian Bureau of Statistics (ABS) for the state of New South Wales. The functional regionalisation generated by the Intramax method is then tested using ABS labour force data. We compare 2001 ABS Census of Population and Housing data aggregated by the ABS labour force regions to the same data aggregated using our functional regions. The results demonstrate the potential value of this technique for the development of a new geography.