Demographics:

1. Demographics are used by organizations to learn more about a population's characteristics.  Segmenting a population into demographics allows companies to assess the size of a potential market and also to see whether its products and services are reaching that company's most important consumers.  Studies of a population based on demographic factors would include:

• Age
• Race
• Gender
• Economic status
• Level of education
• Income level and employment 

Demographics Example

A company that sells high-end RVs would want to know roughly how many people are at or nearing retirement age, and also what percentage of them will be able to afford the product. This information will help the company to decide how much mooney to put towards production and advertising.

http://www.investopedia.com/terms/d/demographics.asp

Psychographics:

1. Demographics describe "who" people are, Psychographics explain "why" they buy (and how to win their attention and motivate them to buy).  Psychographics are the attributes that describe the following of customers and prospective customers:

• Interests
• Personality
• Attitudes
• Beliefs
• Values
• Emotions
• Opinions 
• Hobbies

Psychographic Example

A book publisher is trying to sell a new book.  The publisher might want to advertise on facebook to people who have clicked the "like" button on Facebook posts associated with reading.  They may also want to advertise to anyone that says they like to read on their profile.  Enjoying reading would be a psychographic example because it tells the publisher about your attitude towards reading.

  http://www.marketsegmentation.com/what_are_psychographics.html