1. Economic classifications
Day 1 – first morning session
Basic principles of classifications
Marie-Madeleine Fuger (INSEE -France-)
Gheorghe Constantinescu (INSSE -Romania-)

2. Definition of a classification
A language
Behind a given wording whatever the language, the same concept
A tool
No production of data without structuring reference
A model
Required for any comparisons

3. Role of a classification
A classification is :
A common language
A vocabulary as well harmonized as possible
Which allows a global knowledge on the organization and the production processes, on the outputs, etc.
A selected view of a given universe
different possible structures concerning a universe
So one selected view
Which includes pros and cons (that’s the life…)
It is often the result of a compromise

4. Classification vs Nomenclature
Historically “which names”
the “nomenclator” named the Roman senators when they entered the Senate
Extended to “which structures a universe”
the “nomenklatura” in Former Soviet Union (the list of the “advantaged society)
generally used in Latin language countries
Classification
“which structures a universe”
e.g. Hierarchical ascendant classification (HAC of the multidimensional data analysis)
Both words can be indifferently used
In EU: NACE but CPA

5. What is a classification ?
A classification is a tree-structure of successive partitions strictly linked

6. What is a classification ?
Level 1
Item-father
100
200
etc
Item-son
110
Item-son
Level 2
120
220
210
Level 3

7. What is a classification ?
It is a way to organize an universe in a unequivocal and structured way
Each level is divided into mutually exclusive items
Each item is linked to only one item from the upper level
Each item-son is ALWAYS
Either like the item-father
Or a subset of the item-father
It is NEVER a grouping of parts of various item-fathers
Each item of a level represent an identifiable set of objects
Each item is given a name and a code for easier management

8. The importance of coding
Example :
100 Goods
110 Commodities
190 Other goods
200 Services
210 Tourist services
211 Transports
212 Hotel and restaurants
219 Other tourist services
220 Works on a fee and contract basis
221 Treatments of a partial process
229 Other works
etc.
100
110
200
120
220
210 …
212
211
219
229
221
(110)
(120)

9. A complete structure
The universe
Missing items : potential problems when coding and in IT systems

10. Classification types Codes, catalogues Juridical classifications
One item = One object explicitly named
e.g. geographical codes
dictionnary
Juridical classifications
Items defined “in extension”
Content list finished
Statistical classifications
Item defined “in comprehension”
Content cannot be described as an exhaustive list

11. Central and dedicated classifications
Dedicated : tool set up for a target or an environnment
Surveys (collection), uses (synthesis, dissemination)
Customs, prices, consumption, production, etc.
HS, COICOP for IHCP and HBS, EU Prodcom, etc.
Central : all uses
To which converge the data provided by the dedicated classifications
ISIC and CPC
activities : structure the units (which perform activities);
products: structure the objects produced and exchanged

12. Definition of a classification
A classification defined by its structure is not self-sufficient
Explanatory notes
To describe the content of each item
Notes at any level are useful
Eventual references to other classifications but
A classification must be understood alone
Methodology
How to use it : concepts definitions, rules
To be relevant, updates and revisions are needed

13. Construction criteria
Generally (by definition)
Covering
The whole concerned universe is covered
All items independent
Homogeneity
Whatever the criteria : items as homogeneous as possible
Relevance
Items must be statistically interesting and generally accepted
Continuity
Statisticians are reluctant to changes :  breaks in their time series

14. Construction criteria : ACTIVITY
An activity is defined by the triptych « input-process-output »
An activity classification is defined according to these 3 criteria
The production process
An activity classification is not only a list items described by « Manufacture of… » or « Production of… »
But essentially a set of « actions », eventually precised by physical or intangible outputs
Inputs and outputs
 All these criteria differently weighted depending on the domains and on the levels : production process is predominant for detailled categories and less important at more aggregated levels

15. Construction criteria : Products
Different options may be considered
List of products arranged in some logical sequence
Market-oriented or demand based
Intrinsic nature or physical caracteristics of the product
Industry of origin
Each methodology has pros and cons
But, watch out boundary problems

16. Revision versus Update
New « view »
New structure
eventually, new concepts, new coverage
 So, a new classification
Update
Same structure
Minor changes
Precisions
 The same classification « younger »

17. Exercice Be a list of items (construction works)
Objective : try to build a classification in 2 levels
Define the concepts
Define the classification criteria
Propose headings :
Level 1 has 2 subdivisions
Level 2 has no more than 6 subdivisions

18. Economic classifications
Thank you!