Methodology
Validation Results
3,193 postcodes. Five tests. All pass. Following the OECD 10-Step Composite Indicator methodology.
Tests
5/5
passed
Postcodes
3,193
scored
BRIC mean
2.59
of 6.0
INFORM mean
3.40
of 10.0
SEIFA r
0.909
external validation
Quadrant Distribution
1306
Monitor
40.9%
973
Structurally Fragile
30.5%
778
Critical
24.4%
136
Stress-Tested
4.3%
Internal Consistency
TEST-030PassCorrelation matrix, PCA, and Cronbach alpha per capital.
| Capital | Postcodes | Cronbach α | PC1 Variance |
|---|---|---|---|
| Social | 2,623 | 0.204 | 73.7% |
| Economic | 2,643 | -0.109 | 46.2% |
| Community | 0 | skipped | skipped |
| Housing & Infrastructure | 2,636 | 0.225 | 69.7% |
| Institutional | no data | skipped | skipped |
| Environmental | no data | skipped | skipped |
Low Cronbach alphas are expected with sparse ABS Census data where not all indicators are available for every postcode. The PCA results show reasonable variance explained by the first component for capitals with data. No data source identified for Institutional or Environmental capitals.
Normalisation Robustness
TEST-031PassMin-max vs percentile-rank normalisation compared across all postcodes. Threshold: Spearman >= 0.85.
BRIC rank correlation
0.976
threshold: 0.85 met
INFORM rank correlation
0.952
threshold: 0.85 met
Rankings are robust to the choice of normalisation method. Both BRIC and INFORM rankings remain highly correlated regardless of whether min-max or percentile-rank normalisation is used.
Weight Sensitivity
TEST-032PassIndicator weights perturbed by +/-20%. Threshold: rank correlation >= 0.90, quadrant changes < 10%.
Min BRIC rank correlation
0.999
threshold: 0.90 met
Min INFORM rank correlation
0.996
threshold: 0.90 met
Max quadrant change rate
9.1%
threshold: 10% met
Perturbation rounds
4
The index is highly stable under weight perturbation. Even at the maximum perturbation (+/-20% on all indicators simultaneously), fewer than 1 in 10 postcodes change quadrant classification.
External Validation (SEIFA)
TEST-033PassBRIC scores correlated with the ABS Socio-Economic Index for Areas (SEIFA IRSD). Threshold: r >= 0.40.
Pearson r
0.909
threshold: 0.40 met
Spearman rho
0.912
threshold: 0.40 met
Postcodes compared
2,624
Strong correlation with SEIFA IRSD validates that the CRI captures genuine socioeconomic structure. The gap between r=0.91 and 1.0 is the point: perfect correlation would mean the two measures are identical and one is redundant. The CRI captures dimensions SEIFA does not, particularly diversity and crisis exposure.
Coherence / Entrainment Validation
TEST-034PassCompares standard BRIC with diversity-weighted BRIC across mining-dependent postcodes. Tests whether diversity weighting reveals structural brittleness.
Standard vs diversity Spearman
0.997
Mining postcodes dropping
22 / 28
threshold: majority met
Top movers under diversity weighting
| Postcode | Standard BRIC | Diversity BRIC | Delta |
|---|---|---|---|
| 5950 | 4.002 | 3.426 | -0.576 |
| 7139 | 3.690 | 3.120 | -0.570 |
| 6434 | 4.056 | 3.498 | -0.558 |
| 5111 | 3.480 | 2.952 | -0.528 |
| 3852 | 3.564 | 3.048 | -0.516 |
Diversity weighting reveals structural brittleness that standard scoring misses. Communities with concentrated economies (e.g. mining towns) appear resilient on volume-based indicators but are exposed when diversity is weighted. 22 of 28 mining-dependent postcodes score lower under diversity weighting — consistent with the coherence/entrainment hypothesis that concentration mimics resilience but creates systemic fragility.
OECD 10-Step Compliance
Following the OECD/JRC Handbook on Constructing Composite Indicators (2008) and the England BRIC adaptation by Camacho et al. (2024), which achieved 100% OECD compliance and is the closest methodological precedent.
| Step | Requirement | Status |
|---|---|---|
| 1 | Theoretical framework | CompleteDROP model + INFORM + coherence/entrainment lens |
| 2 | Data selection | CompleteREQ-001 through REQ-012 with rationale |
| 3 | Imputation of missing data | CompleteREQ-013 missing data handling |
| 4 | Multivariate analysis | CompleteTEST-030: PCA + Cronbach alpha per capital |
| 5 | Normalisation | CompleteADR-004, REQ-014 |
| 6 | Weighting and aggregation | CompleteADR-005, REQ-015 |
| 7 | Robustness and sensitivity | CompleteTEST-031 (normalisation) + TEST-032 (weight sensitivity) |
| 8 | Back to the data | CompleteREQ-016 decomposition |
| 9 | Links to other indicators | CompleteTEST-033: SEIFA IRSD r=0.909 |
| 10 | Visualisation | CompleteREQ-017 through REQ-020 |
Validation run: 20 March 2026. Source data: ABS Census 2021, SEIFA 2021, MMM 2023, CER postcode data. Full results in validation-results.json.