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I intend to classify areas based on the population or population density. By classify I mean whether the area is rural, urban or sub urban specifically in Europe. As a input I would have either postal code of the area or coordinates. Based on which i want to know under which classification that area falls.

Is there any API which could help me retrieve population or population density or region classifier based on postalcode or coordinates of location?

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Postalcode might be difficult as it is not a real location attribut and used for organisation of delivery. For example the town where i work has above 20 postal codes that does not represent anything close to districts where you could maybe find population data for. Also those postal codes are overlapping with administrative boundaries, so you can´t (at least in cities and with high accuracy) create a n:1 relation from postal code object:administrative object.

Based on location should be no problem depending on what data you want to use. For europe the most general population data you can get from the EU itself for the NUTS3 regions beeing the biggest scale. There are different possibilities for access. The following link might be what you are looking for:

http://ec.europa.eu/eurostat/web/json-and-unicode-web-services

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