4. What are standard classifications

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4.1 North American Industry Classification System (NAICS 2007)
4.2 North American Product Classification System (NAPCS – Provisional)
4.3 National Occupational Classification for Statistics (NOC-S 2006)
4.4 Classification of Instructional Programs (CIP 2000)
4.5 What do the digit levels of a classification code mean?
4.6 Updating classification systems

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In order to ensure that data sourcses of measurement. These systems provide standard definitions to categorize data for a wide range of economic and social variables. They list detailed classes and codes and are used to collect and publish statistical data. While many international standards exist, Canada and other countries have found it necessary to adapt or develop their own to meet national needs. These standards are detailed in the subsections below.

Statistics Canada has used standard classifications since the 1940s when systems for classifying industries and occupations were put in place. Even so, while Statistics Canada is working to develop standard variables across surveys for key concepts, this work is ongoing and not all surveys (e.g. some household surveys) have implemented standard definitions, so that not all data are available by these categories. However, most economic data at Statistics Canada conform to standard statistical classifications, especially for defining industries, products and occupations.1

Standard classifications provide common definitions that are obligatory for a wide variety of surveys at Statistics Canada. This gives us a tool to ensure that we can integrate data from multiple sources and can compare data from those sources meaningfully. In this way, the standards are an important asset. They are what allow us, for example, to build a satellite account for measuring the economic contribution of culture.

The fact that we use standard definitions means that data from these multiple sources are classified with definitions that meet most needs. However, the standard definition may not always provide a simple, customized fit for every user or every use.

4.1 North American Industry Classification System (NAICS 2007)

NAICS was developed in the 1990s by the statistical agencies of Canada, Mexico, and the United States to provide common definitions and a common statistical framework for analyzing statistical data relating to industry and the economy. NAICS is described by Statistics Canada as "a comprehensive system encompassing all economic activities" (Statistics Canada 2007a, Introduction).

NAICS has a hierarchical structure, dividing the economy into 20 sectors at its highest level: five sectors are essentially goods producers, while 15 are service providers. The system is based on a single production-oriented concept. Producing units are grouped into industries according to similarities in their production processes and technologies. This means that, in the language of economics, producing units within an industry have similar production functions that differ from those of producing units in other industries.2 NAICS is a production-oriented industry classification system for statistical agencies in Canada, Mexico and the United States, designed to support the standard measurement of inputs and outputs, industrial performance, productivity, unit labour costs, and employment that reflect structural changes occurring in the three economies.

4.2 North American Product Classification System (NAPCS – Provisional)

The 2004 Framework used the Statistics Canada's Standard Classification of Goods (SCG) and the United Nations' Central Product Classification (CPC) to categorize culture goods and services, respectively. A new classification system for products, the North American Product Classification System (NAPCS), has replaced the use of the SCG and CPC introducing new classes for services in Canada, the United States and Mexico. NAPCS is a classification that organizes goods and services throughout the economy in a systematic fashion. Whereas the SCG and CPC typically group products according to component material and industry of origin, respectively, NAPCS attempts to group goods and services based on their principal use and how they are used in relation to each other (Statistics Canada 2007b).

The portion of NAPCS that has been developed to date represents the products of selected service-producing industries. While the categories are considered provisional, they are used in the collection of product data in the annual service industry surveys, including culture surveys, and provide the basis of the commodity (product) dimension of the revised Canadian System of National Accounts (CSNA). All tangible goods are classified according to a provisional list of NAPCS goods (the Annual Survey of Manufacturers List of Goods) (Statistics Canada 2010). This list classifies goods according to their industries of primary production, based on NAICS. In time, this list will be integrated into NAPCS, which will be the standard for classifying both goods and services in Canada. NAPCS is expected to be released in 2012.

4.3 National Occupational Classification for Statistics (NOC-S 2006)

Statistics Canada has used a standard classification for occupations since the 1940s. The National Occupational Classification for Statistics (NOC-S) is based on the National Occupational Classification (NOC), which was developed and is maintained by Human Resources and Social Development Canada (HRSDC) in consultation with Statistics Canada and is maintained jointly by HRSDC and Statistics Canada.3 NOC-S is designed to classify occupational information from statistical surveys and for related purposes. It provides a systematic classification structure to identify and categorize the entire range of occupational activity in Canada.

The basic principle of classification of the NOC-S is the kind of work performed. Occupations are grouped primarily in terms of the work usually performed, which is determined according to the tasks, duties, and responsibilities of the occupation. Factors such as the materials processed or used, industrial processes and equipment used, the degree of responsibility and complexity of work, and the goods made and services provided, are used as indicators of the work performed when combining jobs into occupations and occupations into groups.

An occupation is defined as a collection of jobs, sufficiently similar in work performed, to allow grouping under a common title for classification purposes. A job encompasses all the tasks carried out by a particular worker to complete her/his duties. As a result, within each group, the occupations are related to each other by similarity of kind of work performed. This approach ensures a kind of homogeneity within groups and a distinction between groups.

The classification of occupations is highly related to other classifications, such as NAICS. NAICS and the Class of Worker classification supplement to the NOC-S, by giving a fuller depiction of the nature of an individual's job. The Class of Worker refers to a person's employment relationship to the business where he or she works, such as self-employed, employee or unpaid family worker.

4.4 Classification of Instructional Programs (CIP 2000)

The Classification of Instructional Programs (CIP) was developed in 1980 by the National Center for Education Statistics (NCES) in the United States; CIP Canada 2000 is the first Canadian version of this classification (Statistics Canada 2000).

Although CIP was designed specifically for the classification of instructional programs, it is also used to classify courses, institutions by programs offered, students and graduates by programs studied or faculty by programs taught. The organizing principle behind CIP is 'field of study'. At Statistics Canada, a field of study is defined as a "discipline or area of learning or training."

4.5 What do the digit levels of a classification code mean?

Each classification system is hierarchical but their structures differ. That is, each list of standard definitions provides different levels of detail. It is designed so that each level collapses or groups categories into a more aggregated (higher) level.

4.5.1 North American Industry Classification System (NAICS) codes

The NAICS hierarchic structure is formed by five levels of aggregation: sector, subsector, industry group, industry and national industry. NAICS uses six digits, all aggregated to a 2-digit industry sector. In the graphic below, each x denotes one digit in the code. NAICS has three-country comparability at the 5-digit level. National industries (6-digit) are country specific.

Figure 3 Hierarchical structure of NAICSFigure 3 Hierarchical structure of NAICS

The structure of NAICS can be illustrated with Arts, Entertainment and Recreation as an example.

Sector:
71 Arts, Entertainment and Recreation

Sub-sector:
711 Performing Arts, Spectator Sports and Related Industries

Industry Group:
7113 Promoters (Presenters) of Performing Arts, Sports and Similar Events

Industry:
71131 Promoters (Presenters) of Performing Arts, Sports and Similar Events with Facilities

National Industry:
711311 Live Theatres and Other Performing Arts Presenters with Facilities

4.5.2 North American Product Classification System codes (NAPCS – Provisional)

The NAPCS hierarchical structure is based on a six-character code, called an Output Group. The first three digits link them to the NAICS industry, which typically produces the product, while the final three digits provide unique detailed codes ordered in a logical sequence. Up to now, a "Dewey decimal" type of format is used to indicate the hierarchy, in which level is separated by a period. The current product codes of NAPCS are provisional; the codes, definitions, and coding structure will all be subject to revision prior to the full publication of NAPCS Canada 2012.4

In the area of services, NAPCS provides a great deal of detail which is not captured in industry surveys. Moreover, NAPCS numbering is not used for survey collection at this time; this may be revisited after the publication of NAPCS 2012. Economic questionnaires collect information at various aggregated levels of NAPCS according to subject matter needs and respondents' ability to provide data.

Starting with reference year 2009, Input-Output Commodity Classification (IOCC) for the Canadian System of National Accounts will be compatible with NAPCS product groups. That is, with minor exceptions, each I-O code will represent one or more NAPCS classes.

The structure of NAPCS can be illustrated with the following example from Film, television and video production services:

Output Group
512011 Film, television program and video production services

Product code:
512011.2 Contract productions of copyrighted audiovisual works

Detailed product code:
512011.2.2 Contract production of copyrighted television programs
512011.2.3 Contract production of copyrighted commercials
512011.2.4 Contract production of copyrighted corporate/industry videos
512011.2.5 Contract production of copyrighted music videos
512011.2.6 Contract production of copyrighted educational videos
512011.2.7 Contract production of copyrighted videos for government
512011.2.8 Contract production of other copyrighted audiovisual works, n.e.c.

4.5.3 National Occupational Classification for Statistics (NOC-S) codes

The NOC-S hierarchical structure consists of four levels: broad occupational categories, major, minor and unit groups. At the lower levels of aggregation, 'Unit Groups', the focus is on grouping by similarity of work performed, whereas at the second highest level of aggregation, 'Major Groups', broad fields of work are sometimes represented, rather than specific types of work performed. At the highest level of aggregation of occupations, termed 'Broad Occupational Categories', very broad fields of work are represented rather than the specific types of work performed. Such broad groupings, by their very nature, reflect skill types rather than skill levels.

The Broad Occupational Category code, designated by a capital letter, is repeated at all levels. Major group codes are created by adding a digit after the letter. This digit appears after the letter at all lower levels in the structure. Minor group codes add a second digit after the letter. Finally, the 4-digit unit group codes contain the letter identifying the broad occupational group, followed by the digit identifying the major group, the digit identifying the minor group and a last digit identifying the unit group (Statistics Canada 2006).

The structure of NOC-S can be illustrated with the following example for Librarians, Archivists, Conservators and Curators.

Broad Occupational Category:     
F Occupations in Art, Culture, Recreation and Sport

Major group:
F0 Professional Occupations in Art and Culture

Minor group:
F01 Librarians, Archivists, Conservators and Curators

Unit group:
F011 Librarians
F012 Conservators and Curators
F013 Archivists

4.5.4 Classification of Instructional Programs (CIP) codes

The CIP is divided into six categories of instructional programs, called chapters, each of which is subdivided into three levels. These consist of the two-digit 'series', which represent the most general grouping of related programs; the four-digit 'subseries,' which represent an intermediate grouping of programs that have comparable content and objectives; and the six-digit 'instructional program classes,' which represent the specific instructional programs. Instructional program classes are the most detailed level within CIP.

The structure of CIP can be illustrated with the following example from Visual and Performing Arts instructional programs.

Chapter:
I: Academic and Occupation-specific Programs

Series:
50. Visual and Performing Arts

Subseries:
50.05 Drama/Theatre Arts and Stagecraft

Instructional Program Classes:
50.0501 Drama and Dramatics/Theatre Arts, General
50.0502 Technical Theatre/Theatre Design and Technology
50.0504 Playwriting and Screenwriting
50.0505 Theatre Literature, History and Criticism
50.0506 Acting
50.0507 Directing and Theatrical Production
50.0508 Theatre/Theatre Arts Management
50.0599 Drama/Theatre Arts and Stagecraft, Other

4.6 Updating classification systems

The periodic revision of classification systems will require the addition of new classification tables to accompany the framework.

Standard classification systems have a significant impact on the collection of economic and social data. They are used to categorize information from a wide range of surveys and provide comparable data over time. The consistent use of standard systems provides important stability for the purposes of data collection and analysis.

Standard classification systems are only updated periodically. This means that new products or industries cannot be incorporated immediately. In some cases, however, a time lag may be useful as the definitions and understanding of new industries take time to develop. This ensures that the standards created have some stability. A good example is digital media, also known as Interactive Digital Media (IDM) or new media. A long-standing debate over how to classify and measure IDM has hinged on the issue of what activities this industry or industries includes, how they differ from existing industries, and what portions of those industries and products meet the definition of culture at a time when these industries continue to develop and change.

NAICS 2007 is being revised, with the next version (NAICS 2012) planned for release in January 2012. It is revised on a five-year cycle in order to ensure that the classification continues to reflect the rapidly changing structure of the economy.

The implementation of NAPCS (Provisional) has begun in various survey programs at Statistics Canada and is a continuing process. NAPCS provides the basis of the commodity dimension of the revised Canadian System of National Accounts (CSNA). Statistics Canada will publish NAPCS Canada 2012 as an economy-wide classification. Manufactured goods and energy products will be integrated with services and culture products, and manufacturing services, retail, and wholesale activities will be added. Further attention will be paid to the treatment of certain subjects, such as intellectual property, intangible and tangible assets, and culture products. In addition, after 2012, an aggregation structure will be developed among the three countries based on the concept of demand.

NOC-S 2006 is being revised for release as NOC 2011. NOC-S and NOC have been updated on a five-year cycle through a co-operative process in which Statistics Canada and HRSDC work together to keep the classifications current, comprehensive and relevant. As part of the 2011 revision process, it was decided to integrate NOC-S and NOC into one common national occupational classification. As a result, in January 2012, Statistics Canada and HRSDC will be releasing one national occupational classification – NOC 2011.

CIP 2000, which is the first iteration of the instructional program classification system, has a 10-year revision cycle. Revisions are conducted jointly with the National Center for Education Statistics. The NCES has released CIP 2010. The Canadian version will be released in 2012.


Notes

  1. More information on Statistics Canada standard classification systems can be found at www.statcan.gc.ca/concepts/index-eng.htm.
  2. For a discussion of the conceptual framework of NAICS, see Statistics Canada, 2007a.
  3. The two classifications differ only in the aggregation structure of the classification. Information about NOC-S is found in Statistics Canada, 2006.  Information about NOC can be obtained from HRSDC's web site: http://www5.hrsdc.gc.ca/NOC/English/NOC/2006/Welcome.aspx.
  4. For a more detailed explanation of how NAPCS is being developed to code products, see Statistics Canada 2007b.
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