The NTEE classification system: tests of reliability/validity in the field of higher education

Abstract

An analysis of the field of higher education reveals a surprisingly large number of classification errors within the (US) National Taxonomy of Exempt Entities database. Of the nearly 4,000 non-profit entities coded within the universe of institutions of higher education, we estimate that approximately 60 per cent were incorrectly included (Type II errors). Institutions incorrectly excluded from the higher education universe (Type I errors) represent roughly 10 per cent of the institutions coded correctly. These errors result primarily from assigning codes on the basis of the names of organisations (for example, ‘College Park Towers’ is classified as a college, when it is in fact a housing complex for senior citizens) and from trying too hard to assign codes in ambiguous situations. The consequences can be significant for the users of these data, and we recommend raising bright warning flags while simultaneously enlisting the help of the entire non-profit sector in improving the classification coding process.