GOVERNANCE AND REGIONAL INCOMES IN AUSTRALIA

GOVERNANCE AND REGIONAL INCOMES IN AUSTRALIA

What effects does governance, industry or remoteness have on regional incomes? This paper uses linear regression and correlation analysis to investigate the relationship between income, local employment in governance of transactions, public administration, the remaining industry classes, and remoteness in 140 functional economic regions of Australia in 2006. Governance provides the advanced services required for trade and innovation. Unlike de jure regions, such as Local Government Areas, functional economic regions are defined to contain, to the maximum extent possible, both the homes and the workplaces of the labour force, thus minimizing spatial autocorrelation present in data from de jure regions. We use data from the 2006 Australian Census of Population and Housing and the Australian Standard Geographical Classification. The analysis shows that, of all these variables, only governance matters for regional incomes.