COICOP revision WORKING GROUP ON INCOME AND LIVING CONDITIONS – HOUSEHOLD BUDGET SURVEY

COICOP revision history – 1st phase (2011-2013) UN Expert Group on International Classifications (EG) discussed the possibility of revising COICOP for the first time in 2011 Bad timing: SNA has just been revised and a revision of COICOP could disturb SNA implementation Essential to assess first the need and scope of this revision UNSD run a global survey to find out what were the main aspects of COICOP that were considered outdated by the Countries

COICOP revision history – 1st Global consultation Results: countries were generally in favour of an update or revision of COICOP, revision is needed to reflect the significant changes in goods and services in some areas: for example, new products had emerged in some areas of household consumption (mainly in Divisions 08 and 09), while some products had disappeared from the market. more detailed guidelines to ensure a proper and correct recording. the introduction of a fifth digit level was also supported by a majority of countries. When : between October and December 2012 Who : 68 countries and 4 international organisations

COICOP revision history – 2nd phase (2013-2015) The results from the global consultation were presented and discussed during the UN Expert Group meeting in 2013 A new Technical Subgroup was set up Mandate: solve issues raised during the 1st global consultation by caselaws + evaluate if the unsolved issues were sufficiently important to justify a revision The TSG-COICOP identified three main groups of issues raised during the first global consultation: issues which would imply a change in COICOP, issues which could be solved by case laws but ideally by a change in structure and issues which could be solved just by case laws.

COICOP revision history – 2nd phase (2013-2015) The TSG-COICOP prepared clarifications on 33 issues and presented its report at the EG meeting in 2015 And recommended launching a full revision of the COICOP classification as there were enough and sufficiently relevant requests for change. Concerning the other purpose classifications in the SNA, it was decided that the COICOP should be revised first and that an impact assessment on COFOG, COPNI and COPP should be conducted after. The revision of COICOP was officially launched

TSG-COICOP Australia Eurostat ISWGNA UNSD Canada ISWGPS IMF Switzerland FAO Austria ILO New Zeeland UNECE Philippines WHO

COICOP revision history – 3rd phase (2016-2017) In March 2016 the TSG-COICOP met in Geneva and drafted a first proposal for a new revised structure of COICOP using the proposals raised during the first global consultation as a starting point. The new proposal introduced an additional level of detail that would better serve the various uses of COICOP in different statistical domains. Goods and services were systematically separated as much as possible.

COICOP revision history – 2nd Global consultation Results: 64% of overall agreement on the proposed COICOP with less than 50% of agreement on divisions 01 (Food and beverages) and 06 (Health) Level of detail considered adequate except for division 01 and 06 that were considered too detailed. The terminology of most divisions was regarded to be easily understandable by the average household. Only division 06 (Health) had a lower average. More than 500 useful and constructive comments that covered all type of issues related with the proposal of revision When : between September and November 2016 The countries that participated in this global consultation represent 93% of the 2014 world GDP (in constant prices). Furthermore, the population of the participating countries represents 77% of the world population. Both participation rates indicate that the answers provided by the participating countries represent well the circumstances and needs of an overwhelming majority of the world’s population and world’s economic output. More than 500 issues going from the main principles of the classification to very concrete implementation issues, goods or services that should be moved to other parts of the classification, missing goods or services, proposals of better drafting the explanatory notes or simple typos. Who : 93 countries and 13 international organisations

COICOP revision history – 3rd phase (2016-2017) Based on the feedback received , the TSG-COICOP met a second time in April 2017, in New York and updated the draft classification. The TSG-COICOP analysed all issues raised during the global consultation and provide answers to each of them The United Nations Expert Group on classifications endorsed COICOP 2018 in its September 2017 meeting with a few minor amendments.

Documents prepared by the TSG-COICOP Introductory guidelines to the COICOP 2018 COICOP 2018 structure and explanatory notes Correspondence table between COICOP 2018 and COICOP 1999 Answers to the comments received during the Global consultation on the revision of COICOP For more information on the COICOP Revision process, please visit the COICOP revision webpage https://unstats.un.org/unsd/class/revisions/coicop_revision.asp

Major changes introduced in COICOP – more detail The new COICOP introduces a 4th level denominated sub-class (5 digits) because: Most of the National Statistical offices collect already more detailed data. It makes correspondence to CPC/CPA easier. It facilitates the separation between goods and services without introducing major breaks in the time series. Most countries answering the first global consultation were in favour of adding a 5th digit Some regional classifications (like ECOICOP for the European Union countries and PACCOICOP 2012 developed by the Secretariat for the Pacific Community) have already a 5th digit.

Number of divisions, groups, classes and sub-classes Level COICOP 1999 ECOICOP 2012 CIOCOP 2018 XX 12 13 XX.Y 47 52 XX.Y.Z 117 145 XX.Y.Z.A N/A 303 299

Major changes introduced in COICOP – more detail An expansion at six digits for Division 01, fully consistent with the 5 digits classification, is provided as an official Annex to the COICOP because: The consumption on food and beverages in the household consumption is very important (from 21% of the total household consumption to 54% among the World countries) and it was considered important to have more detailed information on this area.

COICOP ISCED ICHA CPC/CPA Major changes introduced in COICOP – better correspondence with other classifications Division 06 Health Division 10 Education COICOP ISCED ICHA A better consistence between CPC and COICOP was considered relevant to analyse product flow. Therefore the possibility of linking COICOP and CPC were analysed and some changes introduced were based on a better consistence between the 2 classifications. However a full consistence between the 2 classifications is impossible taking into account that COICOP classifies individual consumption by purpose and when a product is produced it can be used for different purposes. Division 06 Health was completely restructured according to a proposal from the World Health Organisation. The new structure allows an alignment of COICOP with the International Classification for Health Accounts (ICHA) and its family of classifications. Division 10 Education services was also revised to cope with the new International Standard Classification of Education (ISCED 2011) CPC/CPA

Major changes introduced in COICOP – Separation between goods and services The new COICOP includes the distinction between goods and services whenever this is possible and new classes or sub-classes were created systematically for services like repair, maintenance, installation or renting of goods. However this separation is not always possible: Restaurant services, reparations, inpatient care services : goods and service are often charged together On-line services: products like downloads of music and books in a technical perspective could be viewed as a service, but serve the same purpose as products traditionally viewed as goods Bundles of goods and services (telecommunication bundles)

Major changes introduced in COICOP – Classification by durability A majority of countries supports the distinction of goods in Durable, Semi-Durable and Non-Durable and Services for analytical purposes. The distinction was made at the level of classes and sub-classes.

Major changes introduced in COICOP – Changes at division level The highest level of the classification remained unchanged for most of the Divisions to avoid breaks in the time-series. Division 08 and 09 were considerably reorganised and now break down as Information and communication (Division 08) and Recreation, sport and culture (Division 09). Division 07 Transport that previously was dedicated to the transport of individuals includes now the transport of goods also Division 12 was split into 2 divisions: Division 12 Insurance and financial services Division 13 Personal care, social protection and miscellaneous goods and services

Major changes introduced in COICOP – Modernization The list of inclusions and exclusions of all classes was carefully revised to include goods and services that didn't exist when the previous version of the classification was drafted. Products that do not exist anymore in the market were also excluded from the list of inclusions.

Next steps The COICOP 2018 will be presented to the 49th Session of the UN Statistical Commission (March 2018) for endorsement. Correspondence table between ECOICOP and COICOP 2018 is under preparation. Revision of ECOICOP starting in 2018.

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