The scope of this paper is to apply the method of hierarchical cluster analysis to demographic data and discuss the problems of such an approach. Several demographic variables for population change, population structure, fertility and mortality were used to cluster European populations and identify homogenous spatial areas or resemblances among them. Subsequently, these variables were examined to account for the problem of multicollinearity, which affects the cluster analysis results. Several methods were used to solve this problem. Results indicate the validity of cluster analysis for such purposes and its enhanced interpretational power.