1. ESTP COURSE ON ECONOMIC AND SOCIAL CLASSIFICATIONS Introductory course Day 1 – first morning session Basic principles of classifications
Marie-Madeleine Fuger INSEE – France Hans Van Hooff CBS - Netherlands

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 ways to structure 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 an unambiguous (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 only 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 for OCCUPATIONS
How jobs can be organised into a clearly defined set of groups?
Example of similarity criteria:
The tasks or duties performed
The level of supervision
The level of skill
The type of goods or services produced
The social status of the work ….
Similarity criteria should meet the needs of any user
Similarity criteria should meet the needs of any user. Unfortunately different users have different requirements with respect not only to the appropriate level of aggregation but also to the most appropriate similarity criteria. For some users (for example, insurance companies) important criteria may be whether the work is carried out outdoors or indoors, or whether travelling is required or not. For other users, the social status of the work may be most important, or they may want to focus on the materials worked with, the goods and services produced or whether the work requires direct contact with clients and customers. By deciding on the main similarity criteria to be used in the occupational classification, its developers implicitly or explicitly give priority to some users' needs over others. The implications of this for the overall use of the classification must therefore be carefully evaluated.

15. Construction criteria : TERRITORIES
Among others:
Administrative structure
Geographical characteristics (sea, land, mountain,….
Size
Cities vs countryside
Postal codes, ..

16. 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

17. 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 »

18. Exercise Let’s consider 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

19. Thank you!