Measuring Community Economic Resilience in Australia: Estimates of Recent Levels and Trends

We measure changes in community economic resilience (CER) across geo-locations in Australia between 2006 and 2011, a time span characterised by major natural and economic shocks. We build an index of potential CER that captures communities’ stocks of human, social, natural, physical and financial capitals, levels of economic diversity and accessibility to service centres. Using Census data and the ARIA index, we resort to principal component analysis to generate CER indexes at statistical area level 1, which is our community proxy. Our analysis of index values provides a number of useful insights. First, there was a statistically significant improvement over time in the overall CER index in all states and regions. Second, our CER measures improved at a different pace across regions and states while their rank remained mostly unchanged. Third, CER improved over time in social and physical capital and accessibility terms, but declined in human, natural, financial capital and diversity terms. Fourth, communities with a high economic diversity level reported higher capital stock except for natural capital, and communities with a low accessibility level had lower capital stock except for social and natural capital. Finally, CER has a long-term positive association with household income.