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The ENCODE Experiment Matrix at UCSC lists the different available cell types under the categories "Tier 1", "Tier 2" and "Tier 3". What is the difference between these classifications?

What, for example, makes GM12878 a Tier 1 cell type and A549 a Tier 2 cell type?

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The tiers denote the original priority of sequencing and processing the samples. This is understandable given the number of marks and experiment types that ENCODE tried to sequence. Further details are available on ENCODE's website.

Edit: Just to expand a bit, tier one cells were supposed to get processed first. Then tier 2 came second. Of course tier 2 had a LOT more cells, so it got split into 2 and 2.5, since there were already apparently tier 3 cells.

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From Encode's website:

... To aid in the integration and comparison of data produced using different technologies and platforms, the ENCODE Consortium has designated cell types that will be used by all investigators. These common cell types include both cell lines and primary cell types, and plans are being made to explore the use of primary tissues and embryonic stem (ES) cells.

Cell types were selected largely for practical reasons, including their wide availability, the ability to grow them easily, and their capacity to produce sufficient numbers of cells for use in all technologies being used by ENCODE investigators. Secondary considerations were the diversity in tissue source of the cells, germ layer lineage representation, the availability of existing data generated using the cell type, and coordination with other ongoing projects. Effort was also made to select at least some cell types that have a relatively normal karyotype...

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