Projecting Small Area Statistics with Australian Microsimulation Model (SPATIALMSM)

'Think Global, Act Local' has become a theme for development planning of governments around the world. This is partly due to the increasing recognition of the importance of planning at a small area level. As a consequence, there is a need to derive estimates of socio-economic variables for local areas, and project these into future. Regional scientists have been involved in both the small area estimation and the application of regional estimates to Government policy. This paper will describe a new technique to project small area socio-economic statistics into the future using a spatial microsimulation model. Spatial microsimulation models are a new form of microsimulation models that allow small area estimates of socio-economic variables to be derived from survey data, and allow scenario modelling using survey microdata. This paper extends the spatial microsimulation methodology by adding a projection technique that allows projections of the microdata to be derived. The paper applies this method to project variables that target service delivery populations for Australian State Governments. The spatial microsimulation method used also allows some scenario modeling, and the paper will calculate projections of service delivery populations after a scenario of increasing unemployment as a result of the global financial crisis.