Demographics

AAA

DEFINITION of 'Demographics'

Studies of a population based on factors such as age, race, sex, economic status, level of education, income level and employment, among others. Demographics are used by governments, corporations and non-government organizations to learn more about a population's characteristics for many purposes, including policy development and economic market research.

Demographic trends are also important, as the size of different demographic groups will change over time as a result of economic, cultural and political circumstances.

INVESTOPEDIA EXPLAINS 'Demographics'

Segmenting a population into demographics allows companies to assess the size of a potential market and also to see whether its products and services are reaching that company's most important consumers.

For example, a company that sells high-end RVs would want to know roughly how many people are at or nearing retirement age, and also what percentage of them will be able to afford the product. This information will help the company to decide how much capital to allocate to production and advertising.

RELATED TERMS
  1. One-Child Policy

    A policy implemented by the Chinese government as a method of ...
  2. Market Segment

    A group of people that share one or more characteristics. Each ...
  3. Alliance Of American Insurers - ...

    A coalition consisting primarily of property-casualty insurance ...
  4. Market Share

    The percentage of an industry or market's total sales that is ...
  5. Capital Allocation

    A process of how businesses divide their financial resources ...
  6. Bureau of Economic Analysis - BEA

    A division of the U.S. federal government's Department of Commerce ...
Related Articles
  1. Personal Finance

    Demographic Trends And The Implications For Investment

    See how people's movements, ages, deaths and buying patterns affect portfolios worldwide.
  2. Active Trading

    The Importance Of Segment Data

    Key financials often fail to provide insight into large cap companies.
  3. Retirement

    Generational Marketing: Harvest The Whole Family Tree

    Attract new clients by tailoring your message to specific age groups.
  4. Retirement

    Where Top Down Meets Bottoms Up

    Find the investing "sweet spot" by combining these two styles.
  5. Economics

    What is the Income Effect?

    In economics, the income effect is the change in the consumption of goods caused by a change in income, whether income goes up or down.
  6. Fundamental Analysis

    What is a Null Hypothesis?

    In statistics, a null hypothesis is assumed true until proven otherwise.
  7. Investing

    What Has Been Groupon’s Growth Strategy?

    Groupon established a strategy with efforts to become a broader force in the e-commerce world and to expand more strongly into international markets.
  8. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.
  9. Economics

    Afraid Of A New Financial Crisis?

    It may be time for the U.S. to adopt a model for financial companies that better deters risky financial behavior.
  10. Entrepreneurship

    Are You A Business Owner Suffering From Stress?

    Don't run yourself down. It's OK to take a vacation. We give you some tips on how to let go.

You May Also Like

Hot Definitions
  1. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  2. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  3. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  4. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  5. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
  6. Absorption Costing

    A managerial accounting cost method of expensing all costs associated with manufacturing a particular product. Absorption ...
Trading Center