Abstract
In 1997, the North American Industry Classification System (NAICS)--the standard for use by Federal statistical agencies in classifying business establishments for the collection, tabulation, presentation, and analysis of statistical data describing the US economy--replaced the Standard Industrial Classification (SIC) system. There are substantial differences in the method of data reporting under the SIC system and the under NAICS. In this short note, using a Chow Test, we formally provide evidence of a structural break in the US GDP data due to the switch from the SIC reporting system to the NAICS reporting system.
Highlights
In 1997, The US Department of Commerce Bureau of Economic Analysis (BEA) switched reporting gross domestic product (GDP) and other national accounts from Standard Industrial Classification (SIC) System to North American Industry Classification System (NAICS)
US GDP data according to the Standard Industrial Classification (SIC) System
In 1997, the SIC system was replaced by the North American Industry Classification System (NAICS)
Summary
For a detail discussion of the differences between the SIC and the NAICS, see Issue Papers 1 through 6 of Economic Classification Policy Committee (1993a, 1993b, 1993c, 1993d, 1993e, and 1993f). Our objective in this short note was to apply the Chow Test of a structural break to determine if this test would be capable of identifying a break in the time series data of the US GDP due to the switch from the SIC reporting system to the NAICS reporting system in 1997
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