An Econometric analysis of the causes of Indigenous poverty in urban NSW

This presentation focuses on the results of my econometric model of the causes of Indigenous poverty in urban NSW. The model is based on an indicator framework for analysing Indigenous disadvantage developed by the Productivity Commission (2003), in which headline indicators identify multiple areas of disadvantage and strategic change indicators represent possible causes of disadvantage which can be targeted by policy makers. The impact on headline indicators of strategic change indicators and other possible causal variables is estimated by a system of simultaneous equations using data from the 2002 National Aboriginal and Torres Strait Islander Social Survey (NATSISS). A variety of econometric techniques have been employed including the use of replicate weights, due to the complex survey design of NATSISS, and bivariate probit and control function approaches to control for endogeneity bias. Estimation results are discussed in terms of the significance and marginal effects of explanatory variables on each headline indicator of Indigenous disadvantage. The results demonstrate the key causes of Indigenous disadvantage and the interdependence of indicators. The econometric evidence offers insights for the final chapter of my thesis, in which contemporary policies are evaluated in terms of their expected impact on Indigenous poverty in urban NSW.