What Are Demographics? (Definition, Examples and Uses)
By Indeed Editorial Team
Updated May 27, 2021 | Published February 4, 2020
Updated May 27, 2021
Published February 4, 2020
Demographics are the characteristics of a population that have been categorized by distinct criteria—such as age, gender and income—as a means to study the attributes of a particular group. The study of demographic data is essential for businesses, organizations and governments to make decisions. Using this data, businesses can create marketing strategies and governments can implement public policies.
In this article, we define demographics with examples, explain why they are important and show how they are used to understand and support the general public.
What are demographics?
Demographics are the various characteristics of a population. Examples of demographics can include factors such as the race, sex and age of a population that is being studied. The statistical information of the population's socioeconomic conditions is known as demographic data. This data can contain information about the population, such as:
Race and ethnicity
Level of education
Hobbies and interests
Why are demographics important?
Demographics are important because they provide a broad understanding of the different characteristics of a population. This information is particularly useful to government organizations for making crucial policy decisions concerning the population. Corporations and other businesses in the private sector also use demographics to develop a better understanding of the public and, accordingly, make strategic business and marketing plans.
An understanding of demographics and their statistical possibilities is incredibly important for everyone, not just governments, businesses and economists. The decisions that are made using demographics data can have a profound impact on our everyday lives.
Collecting demographic data
The direct method of collecting demographic data involves tracking and researching official records of births, marriages, divorces, deaths and migrations. The U.S. Census Bureau counts the U.S. population by taking a census every 10 years in addition to the annual statistical data they collect and the regular surveys they perform.
Businesses may conduct consumer polls to gather data about what people buy, why they have specific shopping preferences and how much they spend on average. A business can also collect demographic data by monitoring its social media accounts and e-commerce website. As people become more comfortable with sharing a range of personal information online, it is possible to collect more accurate and valuable data using online forms and email marketing.
Online demographic data collection is becoming more common, especially with the convenience and low cost of conducting online surveys. This single-mode method has limitations for simple random samples of the general public, so other strategies such as mixed-mode surveys can be combined for better representation.
Related: Learn About Being a Data Analyst
Uses of demographic information
The use of demographic data has become very important as analysts in private and public sectors have access to more data than ever before. Here are some of the main categories that demographic information is used for:
Since the business model of most companies is reliant on knowing their customers, having demographic information helps them to understand their target audience. It is a powerful marketing tool that helps companies assess the market’s size and allows them to segment it by factors like age, sex, income, cultural habits and buying behavior.
Market segmentation can provide companies with essential insights into their target audience. Companies can identify the segmented groups that are most likely to purchase their products and services as well as those they might be able to convert into customers in the future. They can then leverage these insights when they want to launch new products and services, improve sales and create new marketing strategies.
For example, let's say that a company is producing high-end cars. For marketing purposes, it can identify a target market by researching income, lifestyles and the interest to purchase luxury vehicles. It can then create advertising campaigns targeting this specific segment of the population. By doing so, the company can keep its marketing budget in check while increasing its chances of finding buyers for the cars. Without relevant demographic information, it would not be able to create such focused and cost-effective marketing plans.
A sound understanding of economics is an effective way to use demographic data about finance, health care, real estate and even voting decisions. Using predictive algorithms and big data, analysts can mine consumer data to identify the ways societies function and create accurate reports about economic indicators and consumer trends based on retail sales and employment data.
Consumer trends fluctuate with prevailing social, economic and political conditions. However, having an inkling of what to expect can help companies prepare. They can adjust their production and marketing to meet the market demand, and, thus, remain in business for the long haul.
Local, state and federal governments can use demographic information to create public policies and allocate funds for public services. Data from government and economic surveys combined with population and housing information from the U.S. Census Bureau can provide important social statistics.
Perhaps the most well-known government use of demographics is for the apportionment of each state’s congressional delegation. Based on population change and population density as counted during each census, seats in the U.S. Electoral College are assigned to each of the 50 states (excluding the District of Columbia and Puerto Rico).
Population and health data can be used to determine the needs of schools and hospitals. Community action agencies and regional planning groups are interested in property values, schools and employment. Lawmakers can better understand the needs of the nation and society as a whole when they have access to statistics and demographics. In the long term, the way government entities use demographics can reshape society as a whole.
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