Definition: Top-down classification

Category: International guidelines on statistical business registers

The top down method follows a hierarchical principle: the classification of a unit at the lowest level of the classification must be consistent with the classification of the unit at the higher levels. To satisfy this condition the process starts with the identification of the relevant position at the highest level and progresses down through the levels of the classification in the following way:

1. Identify the position at the highest level of the classification which has the relatively highest share of the value added.

2. Within this second highest level of the classification, identify the position which has the relatively highest share of the value added within this section.

3. Within this third highest level of the classification, identify the position which has the relatively highest share of the valued added within this division.

4. Within this fourth highest level of the classification, identify the position which has the relatively highest share of the valued added within this division, etc. http://circa.europa.eu/irc/dsis/nacecpacon/info/data/en/index.htm