Programmable Cities Assignment 3 M Tjondro | z5191850

Economic Mobility: Measuring the Lucky Country

|______Introduction
This study seeks to establish an economic mobility index (EMI) for Sydney suburbs,1 having regard to widening
income divisions between rich and poor. Economic mobility, or the freedom to determine one’s income elasticity,
is a dimension of opportunity in Australia. Our Lucky Country has long been defined by the narrative of economic
meritocracy; a concept favoured across the income spectrum for both its allure of upward mobility and its
testament to the rags-to-riches dream. Yet American studies challenge this notion empirically, profiling opportunity
as a product of geographic predicates, including proximity to quality social infrastructure, familial and
neighbourhood compositions.2 That a race to the top of the fiscal ladder may instead adhere to a predetermined
trajectory goes to the heart of understanding how, and where, society should disrupt the feedback loop of
disadvantage.3
Thus, an EMI is proposed using k-means clustering; an unsupervised, iterative learning algorithm that partitions
data points according to intra-cluster similarity (which, when selecting optimal algorithm parameters, may result in
inter-cluster dissimilarity). Alongside the benefit of Python’s lightweight language and data manipulation
capabilities, it accesses an array of libraries which are efficient and reliable for processing multivariate datasets.

|______Inputs
Data selection was performed thematically by reviewing the literature for established indicators of relative
economic mobility; this measures the performance of population subgroups against the moving average of all
other demographics.4 Datasets were conceptualised as primary or secondary indicators; the latter referencing
unpaid work as a mobility ‘agitator’ for its opportunity cost to the individual.5 ABS TableBuilder6 proved invaluable

1
Typologies of economic mobility depend on the measure of progress sought to be quantified, either in monetary (absolute
mobility; intragenerational mobility) or social terms (relative mobility; intergenerational mobility). As discusses in the ‘Inputs’
section, the datasets selected for this analysis most closely align with the concept of relative mobility.
2
Chetty, Raj, et al. "Where is the land of opportunity? The geography of intergenerational mobility in the United States." The
Quarterly Journal of Economics 129.4 (2014): 1553-1623.
3
Notwithstanding this, the urban challenge of improving economic resilience should not be conflated with achieving equality of
economic outcome. As summarised by the US’ Federal Reserve Chairman Ben Bernanke, “Although we Americans strive to
provide equality of economic opportunity, we do not guarantee equality of economic outcomes, nor should we. Indeed, without
the possibility of unequal outcomes tied to differences in effort and skill, the economic incentive for productive behavior would
be eliminated, and our market-based economy — which encourages productive activity primarily through the promise of
financial reward — would function far less effectively.” Bernanke, Ben S. The level and distribution of economic well-being. No.
256. 2007. Retrieved from https://www.federalreserve.gov/newsevents/speech/bernanke20070206a.htm
4
Schneider, Donald. "A Guide to Understanding International Comparisons of Economic Mobility." The Heritage Foundation.
Retrieved August 22 (2013).
5
Generally, participation in the unpaid economy appeared inherently tied to social norms. The gender divide is currently
skewed towards lower female workforce participation as a result of engaging in unpaid economy participation: PwC.
“Understanding the Unpaid Economy”. March 2017. Retrieved from https://www.pwc.com.au/australia-in-
transition/publications/understanding-the-unpaid-economy-mar17.pdf
6
Australian Bureau of Statistics. TableBuilder Basic & Pro. Available at
http://www.abs.gov.au/websitedbs/censushome.nsf/home/tablebuilder

1
Programmable Cities Assignment 3 M Tjondro | z5191850

for desired data granularity, with parameters imposed on the reporting geography (NSW Suburbs (SSC)7) and
population characteristics (Counting Persons, PURP8). SEIFA indices were initially included but later removed to
avoid over-representing certain variables.

This study focused on intra-censal data (2016), which is derivative of point-in-time rather than time-series relative
mobility. Evidently, potential for trends extrapolation is restricted, although comparisons to synchronous products
(ABS’ 2016 SEIFA Index) remains valid. Final inputs and their rationale for inclusion are summarised below in
descending order of weighting.9

Classification Dataset Mnemonic Assumptions

Primary Total Weekly Personal INCP Represents immediate financial resources from which passive income
Income may be generated: rentals, dividends, capital gains.
Registered Marital MSTP Economic mobility of those within stable household arrangements
Status (marriage; de facto) is likely to benefit from resource-sharing between
individuals.10
Highest Level of HEAP Educational attainment generally conditions earnings capacity.
Educational
Note: Barriers to education are circumstantial: parents’ educational
Attainment
histories; household income.
Labour Force Status LFSP Employment increases economic mobility; unemployment decreases it.
Note: Semantic generalisations (full/part-time) disregard income
variability within categories, hence a lower variable weighting compared
to INCP.
Proficiency in Spoken ENGP In anglophone countries, low English proficiency is a wage constraint
English and barrier to employability.11
Occupation OCCP Higher professional and managerial roles generally increase economic
mobility, although contemporary issues of automation and import
penetration in certain industries weaken the correlation.
Indigenous Status INGP Rates of mobility are race-dependent, even after controlling for class.12
Secondary Unpaid Assistance to a UNCAREP Economic mobility diminishes due to the opportunity cost where an
Person with a individual is required to devote time resources to the unpaid economy.13
Disability
Unpaid Child Care CHCAREP
Unpaid Domestic Work DOMP

7
1270.0.55.003 - Australian Statistical Geography Standard (ASGS): Volume 3 - Non ABS Structures, July 2016.
http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1270.0.55.003~July%202016~Main%20Features~State%20S
uburbs%20(SSC)~9
8
Locating the person at their place of usual residence, as distinct from at Census night: 2901.0 - Census of Population and
Housing: Census Dictionary, 2016, http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/2901.0Chapter47102016
9
Refer to weights.csv for loadings.
10
Florida, Richard. “What’s really behind economic mobility?” 16 May 2018. CityLab,
https://www.citylab.com/equity/2018/05/whats-really-behind-economic-mobility/560360/. Accessed 19 June 2018.; ElHage,
Alysse. “Economic mobility and family structure: An interview with Richard Reeves.” 29 January 2018. Institute for Family
Studies, https://ifstudies.org/blog/economic-mobility-and-family-structure-an-interview-with-richard-reeves. Accessed 19 June
2018.
11
Though it has been identified as a ‘weak indicator of disadvantage’: .id. “SEIFA – a geek’s analysis of the statistical analysis.”
29 March 2018. .id The Population Experts, https://blog.id.com.au/2018/population/demographic-trends/seifa-a-geeks-
analysis-of-the-statistical-analysis/
12
Chetty, Raj, et al. "The equality of opportunity project." Retrieved January 8 (2013): 2016.
13
It constitutes one of Australia’s largest economies, although no consistent model exists as yet to monitor its extent and
spatial profile. What is clear is a gender divide across most categories of unpaid work, most notably childcare. Interestingly, a
positive correlation is observed between higher education attainment and likelihood of assuming unpaid childcare
responsibilities, hypothesised to result from higher-income households who are equipped with immediate-term financial
resources to sustain reliance on a single income: PwC. “Understanding the Unpaid Economy”. March 2017. Retrieved from
https://www.pwc.com.au/australia-in-transition/publications/understanding-the-unpaid-economy-mar17.pdf

2
Programmable Cities Assignment 3 M Tjondro | z5191850

|______Scientific Basis
The k-means algorithm identifies structures among high quantities and dimensionalities of data by:
• Initialising k centroids;14
• Calculating Euclidean distance squared to data points;
• Repositioning centroids until the distance metric converges to a minimum.15
One example of a k-means output is visualised below, where each point is a sample, colours indicate distinct
clusters and the black dot denotes the centroid.

Source: K-means clustering and Voronoi sets. https://freakonometrics.hypotheses.org/19156

Preliminary observations of the script’s outputs include:

• Inconsistent treatment of outlying data points, evidenced by occasions in which one or more clusters
contained fewer than 10 out of 4,500 data points. This was hypothesised to result from the algorithm’s
difficulty in initialising a ‘global optimum’ of centroids;
• K-means may not be ideal for visualisation approaches to clustering, eg. highly anomalous cluster
distributions are not generally insightful on a map.

A detailed workflow diagram is supplied below.

14
Generally, this is a randomised process such that final cluster outputs may be inconsistent depending on the initialisation.
Though beyond the scope of this discussion, research into optimising initialisation has variously adopted Voronoi polygon and
linear time complexity methods: Reddy, Damodar, and Prasanta K. Jana. "Initialization for K-means clustering using Voronoi
diagram." Procedia Technology 4 (2012): 395-400 ; Celebi, M. Emre, Hassan A. Kingravi, and Patricio A. Vela. "A comparative
study of efficient initialization methods for the k-means clustering algorithm." Expert systems with applications 40.1 (2013):
200-210.
15
Trevino, Andrea. “Introduction to k-means clustering.”, 12 June 2016, Oracle + DataScience.com
https://www.datascience.com/blog/k-means-clustering

3
Workflow
This frame visualises data processing as it becomes incorporated into the function.
scikit-learn function; parameter of 10
5
Structure & unstructured clusters ultimately selected through trial and
1
data sources incoming… error.
Algorithm was re-run and value_counts()
2 …and data is used to determine distribution of data points
concatenated while per bin.
optimising table legibility:
4 Data integrity was tested by
• Dropping non- inspecting extracts for outliers
suburb rows and addressing their impact on
.csv • Replacing column overall data. Where:
headers • Variables’ population count
exceeded suburb Total > 6 Calculate cluster
• Resetting the index
capped at 100%; scores by summing
weighted variable
• It was inconclusive whether values
.xlsx
‘Not States/NA’ counts were
included in Totals > columns
removed.
Weights.csv prescribes a loading ‘w’ 7 Rank clusters by
3 score and write
per variable (weighted linear Note: From this exercise, the
hypothesis was that ABS potentially results to .csv
combination):
" < 0 %&'%()*+, '-(,-).-. -(+&+/%( /+0%1%*2 engineers noise into data to avoid
! " = 0 %&'%()*+, '+-. &+* %/4)(* -(+&+/%( /+0%1%*2 re-identification of individuals on the
basis of particular variables.
" > 0 %&'%()*+, %&(,-).-. -(+&+/%( /+0%1%*2
Note: Weighting was applied prior to cluster analysis,
since preliminary iterations of the model yielded
clusters with stark variances in the number of data 8 Sensitivity analysis of input variables was
points (i.e. suburbs) per cluster, notwithstanding conducted by running the model per unique
trialling various k magnitudes.
dataset and adjusting loadings. 12
Programmable Cities Assignment 3 M Tjondro | z5191850

|______Applications
In the era of the knowledge economy, data analysis delivers new means of interrogating urbanity’s complex layers.
This study adopts one approach, relying on Python functions to synthesise multiple datasets. Such methods are
sustainable, since prospective users may adjust experimental parameters including:
• Variable loadings, to engineer preferred assumptions into the model;
• Number of clusters, optimised statistically or via direct methods;
• Introducing additional datasets to leverage the generative capacity of programmable functions.16
The EMI highlights contiguity of socio-economic stratification, similar in concept to SEIFA. For urbanists, it proposes
another quantitative tool to corroborate qualitative ground truths sourced from city-dwellers. EMI outputs are
interoperable with GIS software: their ease of visualisation appeals to longitudinal analyses, as choropleth maps
assist to affirm or refute legacies of equitable policymaking and historical (dis)investment.
Note that the degree of trend asymmetry observed between IRSAD, IER and the EMI below suggests their
appropriateness for different inquiries.

16
Provided, in the present scenario, that the datasets are formatted similarly.

4
Programmable Cities Assignment 3 M Tjondro | z5191850

5
Programmable Cities Assignment 3 M Tjondro | z5191850

|______Limitations
Economic mobility is inherently subjective, from initial variable selection and weighting17 to the difficulty of
capturing individuals’ risk and debt appetites from ABS data alone. Their impact on core experimental design
considerations is discussed earlier, to the effect that subsequent studies should implement correlation matrices to
eliminate bias in attribute selection. To overcome current parametric limitations, suggested refinements include
supplementation with relevant datasets that sample additional censal years.
Policymaking based solely on the EMI is inadvisable, arguably falling within the jurisdiction of Australia’s anti-
discrimination laws due to its explicit reliance on personal attributes.18 A preferred approach interprets the EMI in
light of other trends, for example:
ABS’ IER emphasises low financial resources accessibility by Sydney’s south-east populations (circled in red,
above) despite relative socio-economic advantage. This questions the positive correlation that may
otherwise be assumed of mobility and advantage, prompting deeper examination into how individuals
respond to systems of available financial choice: advantage enables home ownership prospects but
negatively impacts economic mobility where ownership is encumbered by a mortgage.

|______User Documentation
1. Requisite Input Data Format
1.1 Additional inputs should be placed in the “Programmable Cities Assignment 3 Datasets folder”.
1.2 In its current form, the function is automatically compatible with TableBuilder .xlsx extracts. For
alternative formats eg. .csv, spreadsheet rows should be populated from cell B9 onwards (i.e. 9th
row down and 2nd column across).
1.3 Suburb names should align with NSW State Suburbs SSC (2016) per the Australian Statistical
Geography Standard (ASGS).
1.4 In the final output, Column Headers are prefixed by the Dataset name. As this string may be long,
dataset file names should be chosen accordingly.
1.5 Non-suburb rows not currently named at row 74 of the code will need to be manually populated
so they are excluded in the final output.
1.6 Columns other than the ABS’ ‘Not stated’ and ‘Not applicable’ categories sought to be excluded
will need to be itemised similar to rows 63 and 64 of the code.
2. Python Environment and Libraries
2.1 The function was created in Spyder 3.2.6.
2.2 It relies on scikit-learn and pandas libraries to pre-process (StandardScaler) and cluster (KMeans)
the data.
3. Parameter Adjustment
3.1 Users may input their preferred number of clusters k at row 90 of the code.
3.2 The process of cluster centroid determinations may be supplemented by imposing the maximum
number of algorithm iterations for centroid values and/or tolerance value.
3.3 Variable loadings are alterable via the weights.csv file. Where additional datasets have been
included per 1.1 above, their respective variable names (i.e. Column Headers) will need to be
appended to the list in weights.csv.
4. Output
4.1 The output is results.csv containing weighted attributes, cluster number and rank per cluster.

17
The current model does not account for the cultural dimensions of certain variables. For example, the assumption that race,
in itself, influences Australian individuals’ economic mobility to the same degree as their American counterparts has not been
validated.
18
For instance, Aboriginality; marital status.

6
Programmable Cities Assignment 3 M Tjondro | z5191850

|______Appendix

7
Programmable Cities Assignment 3 M Tjondro | z5191850

|______Bibliography

1270.0.55.003 - Australian Statistical Geography Standard (ASGS): Volume 3 - Non ABS Structures, July
2016. http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1270.0.55.003~July%202016~Main%20Features
~State%20Suburbs%20(SSC)~9

2901.0 - Census of Population and Housing: Census Dictionary, 2016,

http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/2901.0Chapter47102016
Bernanke, Ben S. The level and distribution of economic well-being. No. 256. 2007. Retrieved from
https://www.federalreserve.gov/newsevents/speech/bernanke20070206a.htm
Celebi, M. Emre, Hassan A. Kingravi, and Patricio A. Vela. "A comparative study of efficient initialization methods for the
k-means clustering algorithm." Expert systems with applications 40.1 (2013): 200-210.

Chetty, Raj, et al. "Is the United States still a land of opportunity? Recent trends in intergenerational mobility." American
Economic Review 104.5 (2014): 141-47.
Chetty, Raj, et al. "The equality of opportunity project." Retrieved January 8 (2013): 2016.
Chetty, Raj, et al. "Where is the land of opportunity? The geography of intergenerational mobility in the United
States." The Quarterly Journal of Economics 129.4 (2014): 1553-1623.

DBM Consultants, Economics & Beyond, Me Bank. “ME Household Financial Comfort Report”. February 2017. Retrieved
from: https://www.mebank.com.au/getmedia/12aebd52-62bc-4c22-979d-0c374cfaafdf/Household-Financial-Comfort-
Report-Feb-2017?r404=1

8
Programmable Cities Assignment 3 M Tjondro | z5191850

ElHage, Alysse. “Economic mobility and family structure: An interview with Richard Reeves.” 29 January 2018. Institute
for Family Studies, https://ifstudies.org/blog/economic-mobility-and-family-structure-an-interview-with-richard-reeves.
Accessed 19 June 2018.
Florida, Richard. “What’s really behind economic mobility?” 16 May 2018. CityLab,
https://www.citylab.com/equity/2018/05/whats-really-behind-economic-mobility/560360/. Accessed 19 June 2018.
.id. “SEIFA – a geek’s analysis of the statistical analysis.” 29 March 2018. .id The Population Experts,
https://blog.id.com.au/2018/population/demographic-trends/seifa-a-geeks-analysis-of-the-statistical-analysis/
PwC. “Understanding the Unpaid Economy”. March 2017. Retrieved from https://www.pwc.com.au/australia-in-
transition/publications/understanding-the-unpaid-economy-mar17.pdf
Reddy, Damodar, and Prasanta K. Jana. "Initialization for K-means clustering using Voronoi diagram." Procedia
Technology 4 (2012): 395-400
Schneider, Donald. "A Guide to Understanding International Comparisons of Economic Mobility." The Heritage
Foundation. Retrieved August 22 (2013).

Trevino, Andrea. “Introduction to k-means clustering.”, 12 June 2016, Oracle + DataScience.com

https://www.datascience.com/blog/k-means-clustering

Tools

Australian Bureau of Statistics. TableBuilder Basic & Pro. Available at

http://www.abs.gov.au/websitedbs/censushome.nsf/home/tablebuilder
QGIS 2.18

|______Supplementary Material

Australian Bureau of Statistics. " Socio-economic Index for Areas (SEIFA) 2016. (Technical Paper)." (2018).
Bartholomew, David J., et al. Analysis of multivariate social science data. Chapman and Hall/CRC, 2008.
Chetty, Raj, and Nathaniel Hendren. The impacts of neighborhoods on intergenerational mobility I: Childhood
exposure effects. No. w23001. National Bureau of Economic Research, 2016.
Chetty, Raj, and Nathaniel Hendren. The impacts of neighborhoods on intergenerational mobility II: County-level
estimates. No. w23002. National Bureau of Economic Research, 2016.
Corak, Miles. "Income inequality, equality of opportunity, and intergenerational mobility." Journal of Economic
Perspectives 27.3 (2013): 79-102.
Jarvis, Benjamin F., and Xi Song. "Rising intragenerational occupational mobility in the United States, 1969 to
2011." American sociological review 82.3 (2017): 568-599.
Pew Charitable Trusts. "Economic Mobility and the American Dream: Where Do We Stand in the Wake of the Great
Recession." Economic Mobility Project (2011).
PwC. “Cities of Opportunity 2011”. The Partnership for New York City, Inc. Available at:
https://www.pwc.com/gx/en/psrc/pdf/cities_of_opportunity2011.pdf
Redmond, Stephen J., and Conor Heneghan. "A method for initialising the K-means clustering algorithm using kd-
trees." Pattern recognition letters 28.8 (2007): 965-973.