The Influence of Upper Level NUTS on Lower Level Classification of EU Regions

Abstract

The Nomenclature of Territorial Units for Statistics or Nomenclature of Units for Territorial Statistics (NUTS) is a geocode standard for referencing the subdivision of countries for statistical purposes. It covers the member states of the European Union. For each EU member country, a hierarchy of three levels is established by Eurostat. In 27 EU countries we have 97 regions at NUTS1, 271 regions at NUTS2 and 1,303 regions at NUTS3. They are subject of many statistical analysis involving clustering methods. Having a partition of units on a given level, we can ask the question, whether this partition has been influenced by the upper level division of Europe. For example, after finding groups of homogeneous levels of NUTS 2 regions we would like to know if the partition has been influenced by differences between countries. In the paper we propose a procedure for testing the statistical significance of influence of upper level units on a given partition. If there is no such influence, we can expect that the number of between-groups borders which are also country borders should have a proper probability distribution. A simulation procedure for finding this distribution and its critical values for testing significance is proposed in this paper. The real data analysis shown as an example deals with the innovativeness of German districts and the influence of government regions on innovation processes.

Project has been financed by the Polish National Centre for Science, decision DEC-2013/09/B/HS4/0509.