1. ECONOMIC and SOCIAL CLASSIFICATIONS Introductory course Day 2 – third afternoon session Classifications by purposes: COICOP, COPNI, COFOG, COPP
Marie-Madeleine Fuger
INSEE – France
Hans Van Hooff
CBS - Netherlands

2. Classifications by purposes
Defined by SNA 1993 (chapter XVIII), ESA 1995 for EU
to describe transactions (expenses) of various groups according the objectives they serve
Institutional units concerned with these expenses
households;
nonprofit institutions serving households (NPISHs);
government (administrations);
producers (enterprises)
Types of expenses
individual expenses for consumption (COICOP)
expenses for final and intermediate consumption, investment (FBCF), transfers (COFOG and COPNI)
expenses for intermediate consumption, investment/FBCF (COPP)

3. Common purposes / socio-economic objectives

4. Classifications by purposes
COICOP is used to classify the individual consumption expenditures of households, NPISHs and general government;
COFOG and COPNI are used to classify a range of transactions made by general government and NPISHs respectively;
COPP is used to classify intermediate consumption and capital outlays of companies.
Structure
Each classification has three levels of detail:
Level 1 – Divisions (two-digit numerical code)
Level 2 – Groups (three-digit numerical code)
Level 3 – Classes (four-digit numerical code)

5. Classification Of Individual COnsumption by Purpose
COICOP
Classification Of Individual COnsumption by Purpose
It is used to classify transactions made between producers and the institutional sector of households. COICOP identifies objects or objectives for which these transactions are made.
Structure :
14 Divisions 58 Groups Classes
Most of the classes can include goods and services
Most classes comprise either goods or services;
Classes are specified as „durables“, „semi-durables“, „non-durables“ or „services“.

6. COICOP COICOP is essentially divided into three parts:
Divisions 01 to 12 Individual consumption expenditure of households
Division 13 Individual consumption expenditure of NPISHs
NOTE: All consumption expenditures of NPISHs are also treated, by convention, as being for the benefit of individual households;
Division 14 Individual consumption expenditure of general government
NOTE: Some of the consumption expenditures of general government are defined as individual;
Divisions 13 and 14 were introduced in COICOP in order to obtain an specific aggregate of 1993 SNA, named “actual final consumption of households ” or “actual individual consumption ”.

7. Broad structure of COICOP
01-12 Individual consumption expenditure of households
01 Food and non-alcoholic beverages
02 Alcoholic beverages, tobacco and narcotics
03 Clothing and footwear
04 Housing, water, electricity, gas and other fuels
05 Furnishings, household equipment and routine household maintenance
06 Health
07 Transport
08 Communication
09 Recreation and culture
10 Education
11 Restaurants and hotels
12 Miscellaneous goods and services
13 Individual consumption expenditure of non-profit institutions serving households Individual consumption expenditure of general government

8. COICOP Units to classify
Divisions : expenses to purchase goods and services for consumption; These divisions group various goods and services by “consumption function” covering the same need*
* this theoretical rule faces some exceptions
Divisions 13 et 14: see respectively COPNI and COFOG
Multi-functional products – bundles of goods ans services
General rule concerning goods and services covering several functions: to be classified in the division covering the main use
General rule concerning goods and services grouped together: analyze the various functions concerned then split by function or, lack of anything better, classify in a “grouped function”

9. COICOP Interpretation Linked classifications Explanatory notes
Correspondence table with CPC concerning Divisions 01 – 12 (published by OECD)
Correspondence table with CPA 2002 and CPA 2009 concerning Divisions 01 – 12 (prepared by EU member states)   
Linked classifications
COPNI : Division 13
COFOG : Division 14
ISCED

10. COICOP
Uses of COICOP
National Accounts
Household Budget Surveys
Consumption Price Indexes
Purchase Power Parities
Food safety statistics or environment statistics.
In EU, strong feeling for more detail at national level (for CPI) and in HBS and PPP which led to more detailed classificationS
In EU

11. COICOP Need for a revision?
♦ The UN Expert Group on International Statistical Classifications (EG-ISC) periodically reviews classifications to ensure their relevance for the production of statistics;
♦ The need for a revision of COICOP has been raised by countries and organisations to reflect the emergence of new consumer goods and services and the development in consumption patterns;
♦ UNSD in late 2012 conducted a global survey to evaluate the need for a revision. 74 countries has replied to the survey;
♦ The EG-ISC in 2013 discussed the outcome of the survey and
did not agree on an immediate need for a revision
agreed to form a Technical Subgroup that would look at case law issues

12. COICOP: What has been done in EU?
Task Force launched 2010
Classifications section
HICP
PPPS
HBS
Food safety statistics
Environment statistics
Draft revised five-digit level COICOP that could be used in all domains
Based on the version produced by the COICOP classification/HICP Task Force in 2005

13. COICOP in EU
WHY?
The development of one single and harmonised classification for the ESS.
The development of a more detailed classification.
The solution of a number of existing problems and the incorporation of recent developments in consumer markets.
Since the introduction of COICOP in 1999 the consumer market products have changed.
New products need to be reflected in the classification!

14. COICOP: What will be done in EU?
The ESS now has a single harmonised COICOP classification at five-digit level:
COICOP 5-digits (may 2011). Structure and explanatory notes have been released in december 2013
Structure : 12 Divisions Groups Classes
303 Categories
Roadmap for implementation
Discuss in the different relevant working groups
Revision of legal basis of HICP and PPP
Level of detail of transmission of data for all three domains
Impact on data collection at national level
Timetable of implementation
On the basis of these discussions, a common implementation plan will be drawn up.

15. Classification Of Individual COnsumption by Purpose
COPNI
Classification Of Individual COnsumption by Purpose
SCOPE: It is used to classify expenditures of NPISHs by purpose. COPNI serves to classify a whole series of operations (the spending of final consumption, the intermediate consumption, gross fixed capital formation, capital transfers and current transfers) made by non-profit institutions serving households.
Structure :
9 Divisions 26 Groups 30 Classes
01 Housing
02 Health
03 Recreation and culture
04 Education
05 Social protection
06 Religion
07 Political parties, labour and professional organisations
08 Environment protection
09 Services n.e.c.

16. Classification Of Individual COnsumption by Purpose
COPNI
Classification Of Individual COnsumption by Purpose
Uses of the classification
National accounts for the aggregate “actual final consumption of households”;
COPNI can be used to facilitate international comparisons of the activities of NPISHs.
Units of classification
In principle, COPNI classifies individual outlays of NPISHs according to the purpose they serve;
In practice, the NPISHs themselves will usually constitute the units of classification.

17. Classification Of the Functions Of Government
COFOG
Classification Of the Functions Of Government
SCOPE: It is used to classify the government expenditures according to the purpose for which the funds are used. COFOG distributes the expenses of general government in ten categories according to their purpose.
Structure :
10 Divisions
69 Groups
109 Classes
01 General public services
02 Defence
03 Public order and safety
04 Economic affairs
05 Environmental protection
06 Housing and community amenities
07 Health
08 Recreation, culture and religion
09 Education
10 Social protection

18. COFOG Uses of the classification Units of classification
A major use of COFOG is to identify consumption expenditures that benefit individual households and that are transferred to Division 14 of COICOP;
COFOG is used for making inter-country comparisons of the extent to which governments are involved in economic and social functions..
Units of classification
in theory: individual transactions of government
in practice: units => outlays
First, the COFOG codes are assigned to the government units (agencies,
offices, programme units, ministries and similar units of government);
Second, all outlays, made by a unit, will be coded to the COFOG code
assigned to that unit.

19. Classification of the Outlays of Producers according to Purpose
COPP
Classification of the Outlays of Producers according to Purpose
SCOPE: It is used to classify the intermediate consumption and the capital expenditures of companies.
Structure :
6 Divisions
22 Groups
23 Classes
01 Outlays on infrastructure
02 Outlays on research and development
03 Outlays on environmental protection
04 Outlays on marketing
05 Outlays on human resource development
06 Outlays on current production programmes, administration and management

20. COPP Uses of the classification Classification Unit: Transactions
COPP can inform about the “outsourcing” of activities of companies: provide information about trend to buy outside services they used to produce themselves
Classification Unit: Transactions
In principle, COPP classifies outlays of enterprises by purpose;
Outlays of enterprises by purpose may be divided into:
▪ current expenditures
outlays on intermediate goods and services;
▪ capital expenditures
investment in produced fixed assets;
investment in non-produced fixed assets;
outlays of enterprises, for instance, to develop software, to construct roads or to carry out major repairs or improvement of capital goods.

21. Thank you!