A computerized method of representing a dataset with an optimal layer of a taxonomy includes obtaining a taxonomy including a hierarchical arrangement of layers, wherein each layer represents a cluster set containing at least one cluster, wherein each cluster represents at least one record within a dataset; identifying a range of taxonomy layers based on a measure of intra-cluster homogeneity of each cluster within the taxonomy; selecting a taxonomy layer within the identified range as an optimal layer of the taxonomy, the selecting being based on a measure of inter-cluster heterogeneity between clusters of a taxonomy layer within the identified range; and labeling clusters within the optimal layer of the taxonomy.