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What Are the Different Types of Socio-Economic Indicators?

By Marissa Meyer
Updated May 16, 2024
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Socio-economic indicators are used to measure social and economic development within a specific population. Data is gathered from the census, administrative databases or polls in an area, and it is used to assess characteristics of the community, such as employment rates, crime rates, poverty status, education levels and life expectancy. Analysis of these indicators can allow researchers to reach conclusions regarding the physical and economic well-being of regional locations and the people living there.

The socio-economic composition of a community plays an important role in gauging the health of community members. When socio-economic indicators are used to assess health, researchers focus on poverty and homelessness rates, education levels, employment status and income. When individuals are more financially solvent, the community as a whole is healthier because more people have access to healthcare and are less likely to introduce disease. Life expectancy and housing arrangements might also be used to determine which populations suffer a more significant health risk.

Socio-economic indicators are also used to gain understanding of the lifestyles, needs and desires of individuals being studied. These findings are used by politicians and marketing researchers to customize their approach so that they can be better connected with the community. Indicators that gauge financial solvency such as education levels and employment status might be used, as well as other indicators, such as country of origin, literacy and family size. An example of the use of socio-economic indicators in practice would be a politician quoting famous writers while campaigning in a community that is highly educated and literate or a corporation running advertising in Spanish in a community that has a strong Hispanic heritage.

Researchers use socio-economic indicators to monitor economic conditions and provide information to businesses and developers regarding whether specific areas would be profitable. Indicators that might be assessed include employment rates, crime rates, home values, annual incomes and population ages. Socio-economic indicators are valuable when determining whether a community will desire a product and whether individuals who live in the community are members of a target demographic. Many businesses continually monitor socio-economic indicators so that they can appear to be in touch with community members and so they have options if their business does not succeed in its existing location. In addition to basic socio-economic indicators, researchers might try to ascertain answers to questions that are more specifically related to their business and the product or service that they hope to market in the area.

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Discussion Comments
By stoneMason — On Feb 08, 2013

Socio-economic indicators are useful for everything. Organizations and politicians can look at poverty, income and employment rates to make an analysis about development. Or someone studying why people smoke can use socio-economic indicators income, education and occupation to determine who is more likely to smoke.

Socio-economic indicators, which really can be any category describing the qualities of society, help us make correlations to understand cause and effect relationships.

Anyone here studying social sciences? I'm sure you know what I'm talking about.

By fBoyle — On Feb 08, 2013

@feruze-- I'm sure they do. But for the most part, these indicators are used by private companies such as insurance companies. They determine individual insurance plans based on health, crime rates and income.

For example, if a particular area experiences more than usual crime rates or if a disease is seen more commonly in part of the population, insurance policies may cover different illnesses and injuries. And this is not just for health insurance, but also car, property and life insurance.

By bear78 — On Feb 07, 2013

Are socio-economic indicators only used for profitability by companies?

Doesn't the government use these indicators to develop social programs?

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