Also known as demographic economics, population economics is a process that is used to apply the basics of economic theory to the attributes related to the population makeup of a given geographic location. Within the scope of this type of economic application, factors such as the total number of residents; the age groupings of that population; and statistics regarding age, gender, orientation, and race may also be considered as part of the process. Depending on the type of application involved, the goal may be to project future expansion of the population, changes in life expectancy from one decade to the next, or even what type of improvements in terms of the number of available jobs or public services will be needed within that area in the future.
At times, population economics is used to provide a better understanding of the overall condition and size of a population within a given area. This approach can be used to get some idea of the average cost of living within a community or a larger area, compare that to the average income per household, and come up with some valuable information and suggestions on how to create more of a balance between the two figures. The idea is that by doing so, it is possible to broadly assess the needs of the community and develop plans that ultimately benefit everyone who lives in the area.
At other times, population economics may be used as a means of taking a closer look at a specific group within the local demographics of the area. For example, the goal may be to focus on the current status of single parent households in terms of the total share of the population that make up this particular group, determine factors relevant to all these households and identify to what extent the community is providing access to services that are of use to single parent households. This type of data can be very important when it comes to urban planning for hospitals, schools, and other types of public services.
The ultimate goal of population economics is to identify the relationship between the makeup of the population with the currently prevailing economic circumstances that prevail within that population. Doing so can often provide insights that governments can use to improve current conditions for people living within that area. At the same time, companies can make use of population economics to determine if it is feasible to open new facilities within a particular area and expect sufficient support to maintain those facilities. For example, after considering all relevant factors, a company may decide that there is a sufficient labor force to staff a manufacturing plant while paying an hourly wage that is equal to or slightly better than the current average household income in the area, making the placement of that factory within a community a winning situation for all involved.
