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.


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BREAKING DOWN '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.

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