Different data allocation methods are used for Esri demographic data depending on the available geography levels in each country.
United States and Canada
The data allocation method allocates block group data to custom areas by examining where the population is located within the block group and determines how much of the population of a block group overlaps a custom area. This method is used in the United States and Canada. The population data reported for census blocks, a more granular level of geography than block groups, is used to determine where the population is distributed within a block group. If the geographic center of a block falls within the custom area, the entire population for the block is used to weight the block group data. The geographic distribution of the population at the census block level determines the proportion of census block group data that is allocated to user-specified areas as shown in the following graphic:
See how data is summarized in the Demographics and GeoEnrichment section of the ArcGIS REST API documentation.
Depending on the data, households, housing units, or businesses at the block group level are used as weights. Employing block centroids is a superior method, because it accounts for the possibility that the population may not be evenly distributed geographically throughout a block group.
Countries other than the United States and Canada
In countries where a geography level analogous to U.S. Census blocks is unavailable, Esri uses a proprietary set of population-weighted points to allocate data available at larger geographies to any custom area. A patent is pending on this Esri-developed data allocation technique.