In any analytical study conducted at subnational levels, the choice of the territorial unit is of prime importance. To address this issue, the OECD has classified two levels of geographic units within each member country (). The higher level (Territorial level 2 [TL2]) consists of 363 larger regions while the lower level (Territorial level 3 [TL3]) is composed of 1 802 smaller regions. All the territorial units are defined within national borders, and each TL3 region is contained in one TL2 region. In most cases TL3 regions correspond to administrative regions, with the exception of Australia, Canada, Germany and the United States.