Comparable Areas, OA or LSOA?

To start with what’s the difference between a Postcode, LSOA and OA?

Lower Super Output Areas (LSOA) fit within Local Authority boundaries and Output Areas (OA) fit within an LSOA. These were originally developed as part of the census to allow for comparison across different parts of the country. To achieve this, each area needs to contain roughly the same number of residents and households.

The data grouped in the LSOA and OA is used by the government to allocate funds and services to areas in the most need. e.g. if an area has a higher than average number of elderly residents then extra resources will be required to support the community.

Postcodes

Postcodes are the most granular level you can split a population into. They are the first piece of information you will learn about your customers and the place to start when segmenting your audience by geodemographics.

Once you know where your customers are you can join their postcode to a higher area to find external data about them, such as average income, attitudes and health factors.

Output Areas

There are a total of 232,294 OA (or equivalents) in the UK with England containing 171,372, Wales 10,036, Scotland 46,352, and Northern Ireland 4,537.

In England, Wales and Northern Ireland the minimum OA size is 40 resident households and 100 resident people, but the recommended size is slightly larger at 125 households.

In Scotland, the minimum OA size is 20 resident households and 50 resident people, with the target size being 50 households.

Lower Super Output Areas

As the Census is legally bound to keep data anonymous, on some occasions an OA may be too small to reveal information due to the small number of residents.

LSOA overcome this issue by aggregating data at a higher level, this allows for greater anonymity. In essence, an LSOA is a group of OA in the same geographical area. An LSOA contains between 1,000 and 3,000 residents with 400 to 1,200 households. The target size is normally somewhere between these two numbers.

There are a total of 42,619 LSOA (or equivalents) in the UK with England containing 32,844, Wales 1,909, Scotland 6,976, and Northern Ireland 890.

Which should you use, LOSA or OA?

Ordinarily, we all like to work on as granular a level as possible, however, Some data is only released at an LSOA level so it depends on what your use case is. You also need to consider outliers, e.g. if you are looking at property price averages then a single sale for a very cheap or expensive property at an OA level may throw your analysis as there will be fewer property sales to calculate and average.

In general, OAs are the best option if your use case allows it, but if there are issues with anonymity, outliers or limits on your data sources then LSOAs are the best alternative.