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Demographics is the study and categorization of people based on factors such as income level, education, gender, race, age, and employment, just to name a few. 

In business, demographics are important because they help a company better target the market for its products, and thus better utilize its marketing expenditures. For example, if a company is using direct mail to market luxury products, it will use demographic studies to find neighborhoods containing individuals with high incomes. The company will then mail its brochures to those target neighborhoods.

Businesses also use demographics as a predictive tool. A pharmaceutical company will monitor demographics such as birth rates. If they see a decline in the birth rate, they may decide to put less research resources into pediatric medicine, and more into research aimed at producing medicines for the adult population.

Governments use demographics to track the effects of their policies. For instance, a government might perform a demographic study on changes in income for each age category to determine if the economic growth that resulted from a recent stimulus policy was distributed evenly among the population. 

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