Implementation of NACE rev.2 in short –term economic statistics: what did we do in practice? Leendert Hoven Statistics Netherlands presentation prepared for the OECD STESEG meeting September 2009

Methods for backcasting 1.Recoding key 2.Micro approach 3.Macro approach 4.Combined micro and macro approach

1. Recoding key On lowest aggregation level: Entire old code => new code a.b.c.d Method can only be applied for 1-to-1 and many-to-1 changes

2. Micro approach (1) Method: repeat entire production process starting from the micro level using new classification Needs: revised (double) classification for –each statistical unit –every period in the time series

2. Micro approach (2) Advantages –method can cope with all transition types –exact relation between old and new results (at least in theory) Disadvantages –time consuming –differences may occur as a result of outlier treatment, imputation for non-response

3. Macro approach (1) Method: revision on aggregate levels with an initial transition matrix Needs: transition matrix based on microdata

3. Macro approach (2) Advantages –method can cope with all transition types –limited amount of work Disadvantage –method is based on assumptions that become more disputable when the length of the series increases

4. Combined micro and macro possibilities: –micro approach at the beginning and at the end of the period with macro approach in between. –linear interpolation –time dependent interpolation –micro approach for limited number of consecutive periods to determine structural patterns in transition matrix

What did we do in practice? (1) Micro approach for turnover of: – industry; – telecommunication; – accounting, tax consultancy and administration; –Management and business consultancy. Macro approach for: –turnover of all other industries; –index of industrial production, using the conversion matrix for December For the calculation of the conversion factors, the number of employees was used.

What did we do in practice? (2) The combined micro and macro approach was not used. The required microdata were not available (or not considered enough reliable), or they were available over the whole period, in case the micro approach was used.

Micro approach for the industry Monthly turnover statistics based on cut-off sample (all units with more than 20 employees) All units (approx 6000) were recoded according to the new classification. 1-to-1 relation for approx 4000 units; remaining units more difficult (1-to-many, many to many); information from Prodcom was used. Dealing with business dynamics proved to be time and resource consuming