Workshop on Price Index Compilation Issues February 23-27, 2015 Classification Systems Gefinor Rotana Hotel, Beirut, Lebanon

2 Classification: Why Classify? Classification systems determine empirical economic analysis. Classification must therefore be: By meaningful criteria Neither too aggregated nor too fine at the published level Acceptable and comparable across countries Comparable across a sequence of accounts Exhaustive and mutually exclusive Flexible: new codes / satellite accounts Useful in determining sampling units and stratification factors February 23-27, 2015METAC and IMF Statistics Dept.

International and regional classification standards Classification of Statistical units Functional expenditure classifications Product classifications February 23-27, 2015METAC and IMF Statistics Dept. 3

Classification of Statistical units Institutional units Establishments of enterprise institutional units February 23-27, 2015METAC and IMF Statistics Dept. 4

International and regional classification standards Activity or industry International International Standard Industrial Classification of all Economic Activities (ISIC, Rev 2, 3,4) Regional variants NACE (EUROSTAT) North American Industrial Classification System (NAICS) Australia-New Zealand Standard Industrial Classification (ANZSIC) February 23-27, 2015METAC and IMF Statistics Dept. 5

Establishments February 23-27, 2015METAC and IMF Statistics Dept. 6

Functional Expenditure classifications Classifications Of Individual Consumption by Purpose (COICOP) February 23-27, 2015METAC and IMF Statistics Dept. 7

Product classifications International systems Harmonized Commodity Description and Coding System (HS) Standard Industrial Trade Classification (SITC) Central Product Classification (CPC) Regional variants Classification of Products by Activity (CPA) [EUROSTAT] Australia-New Zealand Central Product Classification (CPC derivative) Pending North American system Often extensions of industry or activity classifications for PPI, of expenditure classifications for CPI February 23-27, 2015METAC and IMF Statistics Dept. 8

Using classifications in price statistics Expenditure Classifications CPI PPI February 23-27, 2015METAC and IMF Statistics Dept. 9

Using classifications in price statistics CPI Household expenditure surveys use classifications for budget items that are distinct from standard product classification International: COICOP for HES, CPC for price survey, but a correspondence table exists to map CPC into COICOP February 23-27, 2015METAC and IMF Statistics Dept. 10

COICOP: DIVISIONS February 23-27, 2015METAC and IMF Statistics Dept. 11

Using classifications in price statistics PPI and construction put in place price index Classification of establishments in business censuses and surveys, including the PPI price survey. Such censuses and surveys would include both government and privately owned establishments engaged in the covered activities. Production and capital formation surveys should use the same product classification to facilitate supply and use analysis. Issue: National business surveys generally use product classifications that are extensions of the industry classification, but as noted in the previous topic, this classification is not used in coding consumer price surveys, which are an extension of the household expenditure classification. February 23-27, 2015METAC and IMF Statistics Dept. 12