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Rates of dementia were expected to triple by 2050, fuelled by factors including an ageing population and longer life expectancy.
"With advancing age, the prevalence of dementia increases," explained Dr Rosie Gibson, of Massey University's Sleep/Wake Research Centre.
"This can have a significant impact on the health and wellbeing of individuals and their families, as well increasing the burden on the economy, residential and hospitalised care."
Sleep problems were among the most disruptive behavioural symptoms of dementia and had been associated with exacerbated waking symptoms. They also affect the sleep and the coping ability of family carers.
The new project, funded by the Health Research Council, will provide the first broad understanding of sleep and its relationship to the health and wellbeing of older New Zealanders.
It combined four studies using mixed research methods and different groups of older people to address important gaps in the field over the next three years.
The first phase aimed to describe the sleep timing and prevalence of sleep disorders and daytime sleepiness among older New Zealanders, and to explore age-related changes in the relationships between sleep problems and health status.
This would be carried out through the analysis of New Zealand Health Survey data, as well as focus groups.
"Focus groups will be conducted with older Māori and non-Māori to explore cultural and sociological aspects of sleep with ageing, including beliefs and attitudes around sleep problems and their management."
The second phase would explore sleep as a predictor for consideration and admission into aged residential care for people with and without dementia.
This would be achieved through large-scale analysis of data used for assessment and admission into aged residential care, as well as one-on-one interviews.
"Interviews will be conducted with informal family carers who have recently transitioned their family member with dementia into residential care," Gibson said.
"These will explore and represent the sleep experiences of families affected by dementia and the changes before, during and after the transition to formal care."
Gibson's main goal was to develop new strategies to help older people live independently and well, for longer.
"Considering we spend a third of our lives asleep, that's approximately 22 years by the time we reach 65, the importance of it is still largely overlooked in healthcare," she said.
"Older people, people with dementia, and family carers are often disenfranchised in society and under-represented in research that concerns them."