New South Wales and Victoria Australia’s most culturally diverse states

Australian data science consultancy EdgeRed has dived into the Census data to determine the country’s most culturally diverse locales, taking an approach which measures market concentration.

New South Wales and Victoria have been found to be Australia’s two most culturally diverse states according to the study by EdgeRed, with Tasmania determined to be the least so.

To conduct its analysis, Edge Red adopted the Herfindahl-Hirschman index (HHI), described as a common tool to quantify market concentration, with a lower value as such indicating a less concentrated market.

According to the results, which drew on data from the 2021 Census as to birthplace, ancestry and languages spoken at home, the greater Sydney area returned a HHI score of 0.210, which is calculated by “squaring the market share of each segment competing in the market and then summing the resulting numbers”. This method, the firm says, gives a better read on diversity by taking in both the number and distribution of distinct cultural groups.

To illustrate, EdgeRed forwards the example of Lidcombe and Burwood in Sydney’s west, which both feature a variety of different cultural groups. The latter however is calculated to be less diverse according to the HHI metric on ancestry due to a higher proportion of residents in the suburb with a Chinese background – 48 percent against Lidcombe’s 30 percent, which when squared comes out at 23 percent versus 9 percent to greatly impact the diversity score.

As to the overall greater metropolitan areas of each state and territory, Melbourne – which is projected to overtake Sydney as Australia’s most populous city within a decade thanks largely to international migration – ranks a close second on the cultural diversity index at 0.224 followed by Darwin and Perth.

At the other end of the scale, greater Hobart generated a score of 0.407 to rank as the least culturally diverse capital behind Brisbane, Adelaide and the Australian Capital Territory.

Incidentally, among suburbs it was Lidcombe which came out as the most culturally diverse nationwide according to the analysis, scoring a HHI of 0.144 due in part to more than two thirds of its 30,000 or so residents being born outside of the country compared to the national figure of 28 percent.

Here though, the report from EdgeRed demonstrates that using the HHI approach can yield different outcomes on cultural diversity than other definitions and methodologies.

“While exploring the same topic using the latest Census data, an article from the ABC considered Point Cook in Victoria to be the country’s most multicultural suburb based on the fact that the residents are from 86 different countries,” notes author Charlotte Pan. “However, Point Cook ranks slightly lower using this measure because despite this suburb having the most distinct birthplaces, we observe a less even distribution of birthplace and languages spoken at home.”