Transcript NACE: How the revision of a classification can affect

NACE: How the revision of a classification
can affect quality of statistics
Ana Franco
13-Jul-07
NACE a tool for comparing statistics at world level
 The European Classification of Economic Activities (NACE) is
the European reference framework for the production and the
dissemination of statistics related to economic activities.
 NACE is identical with, or an extension of, the ISIC
(International Standard Industrial Classification of all
Economic Activities - classification developed by the UN as a
standard way of classifying economic activities). Also, the
coding systems used in both classifications are, as far as
possible, the same.
 The main principle in ISIC and NACE is to code together
enterprises if they produce the same type of goods or service
or if they use similar processes (i.e. the same raw materials,
process of production, skills or technology).
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NACE: The revision process
 At its thirtieth session in 1999, the United Nations Statistical
Commission agreed that the ISIC should be revised every five
years, thereby keeping the classifications relevant while
avoiding major disruptions in time series. NACE has followed
this revision round and NACE Rev. 2 entered into force in
2008.
 The purpose and rationale for these revisions is to repair
weaknesses in the classifications, to reflect changes in
technology or economic organization, to respond to new and
permanent demands for data and to achieve greater
comparability or convergence among different classifications.
 Focused work on the revision of ISIC/NACE started in 2001
and the regulation establishing the statistical classification of
economic activities NACE Rev. 2 was adopted on the 20th
December of 2006.
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NACE: The revision process (stakeholders)
UN
EUROSTAT
UN Statistical
Commission
Statistical Programme
Committee
UN Expert Group
NACE/CPA Working Group
Technical Subgroup
Task force
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Revision of NACE: an opportunity to improve
quality
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Relevance
Accuracy
Timeliness and punctuality
Accessibility and clarity
Comparability and coherence
Cost and Burden
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Relevance
During the process of revision of NACE/ISIC the opinion of
the users was carefully taken into account.
EU
Large consultation:
-National Statistical
Institutes (NSI’s)
- European trade
associations (FEBI’s)
- European Commission
- Eurostat
- European Central Bank
- And anybody else using
the classification
FAO
Working Party on
Indicators of the
Information Society
Association of
Southeast Nations
Afristat
Workshops in different
regions of the world
UN Technical
Subgroup
NACE Rev. 2
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UN
World-wide consultation:
How: 3 rounds of
questionnaires
To whom: 235 countries
and international
organizations worldwide
When: from 2001
NAICS/NACE
convergence project
Relevance
 As one could expect in such a large operation of identification
of user needs, it has been impossible to take all wishes into
account. Nevertheless, some general concerns were identified
and the result is a revised classification with:
 New groupings
– Information and communication sector
– water supply, sewerage, waste management and remediation
 More tabulation categories for services
–
–
–
–
professional technical, and business services
administrative and support services
real estate, rental and leasing services
art, entertainment and recreation
 More divisions ( to increase international comparability)
– for new groupings and growing services
– in manufacturing and construction
– human health services
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Accuracy
Correspondence between NACE Rev 1.1 and Rev.2
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m
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t
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c
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Rev 1.1 Rev.2
196
1
Rev 1.1
Rev 1.1
1
18
1
Rev.2
a
86
b
c
1
Good
occasion
to correct
errors!
Rev.2
a
b
c
Rev 1.1 Rev.2
214
a
e
d
b
f
e
c
g
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M
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Timeliness and punctuality
- Labour Cost Index
- Job Vacancy survey
- Inform. Soc.
Start of
revision
Business registers
updated
National
Accounts
End2006
2001
2008
Adoption of
regulation
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2009
2010
-Business register
-Labour Force Survey
-Road freight survey
- Structural Business
Surveys
-…
2011
Accessibility and clarity
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A dedicated web page which would contain all available information on NACE
Rev.2:
1.1 the structure of NACE Rev. 2,
1.2 the introductory guidelines,
1.3 the explanatory notes for each code
1.4 the text of the Framework regulation
1.5 the Implementation regulation.
1.6 the correspondence tables between NACE Rev. 2 – NACE Rev. 1.1 and NACE Rev.
1.1 - NACE Rev. 2 in different formats
1.7 Five Handbooks to help National Statistical Institutes during the complex project of
the implementation of NACE Rev. 2
• - Setting up an implementation plan for NACE Rev. 2
• - Implementation of NACE Rev.2 in Business Registers
• - Handbook on methodological aspects related to sampling designs and
weights estimations
• - Handbook on back-casting
• - Rules for classification of units outsourcing their production
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A paper publication which will regroup the elements mentioned under 1.1 to 1.5.
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Accessibility and clarity
 A CD Rom containing the same information can be created at
request
 A general paper informing on the main changes brought by
the new classification has been prepared. This information will
be visible in the Eurostat web site and will contain a link to the
dedicated web page above mentioned.
 The SDDS files, detailed metadata files presented in a
common format which are associated with the data base New
Cronos containing all EU data published by Eurostat, will be
revised informing the users on the changes in the activity
classification and on the specific impact for the statistical
domain.
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Comparability (between geographical areas)
Among EU countries…
 Use of NACE is mandatory within the European
Statistical System: Regulation (EC) No 1893/2006 of the
European Parliament and of the Council of 20
December 2006
 Although national versions allowed…
 And there are also:
– Explanatory notes
– Introductory guidelines
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Comparability (between geographical areas)
But also with the rest of the World:
ISIC
NAICS (USA, Canada, Mexico)
NACE
 Agreement signed by the heads of the statistical agencies of
Canada, the European Union and the United States
concerning a project on the convergence of NAICS and NACE
 A taskforce consisting of experts from the participating parties
have drawn up a list of changes to NACE and NAICS which
may improve the convergence.
 In addition, ISIC had taken into account these revisions to
other major national industry classifications such as ANZSIC
(Australia and New Zealand), JSIC (Japan) and NatSIC
(China).
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Comparability between statistical domains
 Data is published by Eurostat according to NACE in 33
different statistical domains
2008
2009
2010
2011
21
3
6
3
 Solutions:
– Dual coding
– Back casting
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Comparability over time
282
NACE Rev
1.1
NACE
Rev.2
Sections
17
21
1 to 1
196
Divisions
62
88
n to 1
86
Groups
224
272
1 to n
18
Classes
514
615
n to m
214
Correspondences:
 Discontinuity in historical statistics is to be expected in many
statistical domains, both at European and national levels
 Solutions:
– Dual coding
– Back casting
– Correspondence tables
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Coherence
Economic
Activities
World level
EU level
Nat. Level
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Products
Goods
ISIC
CPC
NACE
CPA
PRODCOM
National
versions
of NACE
National
versions
of CPA
National
versions of
PRODCOM
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SITC
CN
Cost and Burden
The revision of NACE will imply several operations in the
Member States:
 The setting up of the implementation plan
 The recoding of the Business Registers according to the new
33%!
NACE (or its national version)
 The adaptation of the statistical surveys (samples and
estimation techniques)
 The reconstruction of time series (double reporting, back32%!
casting)
 The changes of the reference database and related
dissemination issues
 The elaboration of the national version of NACE and the
adaptation of national legislations following the adoption of
the Regulation establishing NACE
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Conclusion
 The revision of a classification,
although a costly and heavy
operation is absolutely needed and
is a good opportunity to improve
the quality of the date produced
using it.
 Relevance is for sure the quality
component which more benefits in
such a revision.
 It is a good opportunity to improve
geographical comparability
 Accuracy can also be improved in
the operation of updating of the
register
 A revision of a classification always
entails breaks in the series,
 Not all the statistical domains are
able to use the new classification
at the same time
 In the transition period timeliness
can undergo.
 The information of the users shouldn't be neglected and it is
important not only to provide information on the new
classification but also on its impact for the data in the different
statistical domains.
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