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Calculating Trade Area Demographics
Calculating Trade Area Demographics

Dive deep into our demographic methodology

Tao Zhou avatar
Written by Tao Zhou
Updated over a week ago

Demographic data is stored at the block level which is a geographic area defined by the US Census Bureau. For more information on block groups checkout this article. To roll this data up to the trade area from the block group we apply one of two methodologies based on the metric. For metrics that are summed we use methodology 1. For metrics that are averages or medians we use methodology 2.

Metrics using methodology 1

  • Population

  • Population Density

  • Households

  • Renter Occupied Households

Metrics using methodology 2

  • Median Household Income

  • Average Household Income

  • Median House Value

  • Average Household Size

Methodology 1

Using this example here, you can see the selected block group is not entirely inside the Radius. The platform calculates the exact percentage of the block group within our trade area and multiplies that percentage by the total population of the block group. We do this calculation across all the block groups that touch the trade area and then sum the values to give you the total population within your trade area. 

There is a limitation to this methodology as the ratio of the block group used in the calculation is based off of the geographical area that intersects with the trade area, not the ratio of population that intersects. For example, 100% of the population could reside within the trade area but we would only include 50% of the population if only half the geographical bounds of the block group are within the trade area.

Methodology 2

Using Median Household Income as our example, you can see the selected block group has a household median income of $59,212. We take the household median income and multiply it by the percent contribution the block groups make to the trade area. We then sum up all the block groups to get the weighted average. 

Note: There is no difference in how our trade area data is calculated between US Census and ESRI as both sources provide data at the block group level.

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