Effetive Java 22 Favor static member classes over nonstatic

Nested class types	Usage and remark	Advantage	Disadvantage
static member classes	Use for public helper class, useful only in conjunction with its outer class. (Such as the operation types of a Calculater).	Save memory. Class specific.	Not instance specific.
nonstatic member classes	Define an Adapter that allows an instance of outer class to be viewed as an instance of some unrelated class.(Such a simple mentations of the Map interface typically use nonstatic member classes to implement their collection views, which are returned by Map's keySet, entrySet, and values methods) The association between a nonstatic member class instance and its enclosing instance is established when the former is created; it cannot be modified thereafter. It is possible, although rare, to establish the association manually using the expression enclosingInstance.new MemberClass(args).	Instance specific.	Adds time to its construction since initialization of the nested class for each instance.
anonymous classes	create function objects(Item 21) on the fly. create process objects, such as Runnable, Thread, or TimerTask instances. A third common use is within static factory methods (see the intArrayAsList method in Item 18). Anonymous classes have enclosing instances if and only if they occur in a nonstatic context. But even if they occur in a static context, they cannot have any static members.	No name.	You can't instantiate them except at the point they're declared. You can't perform instanceof tests or do anything else that requires you to name the class. You can't declare an anonymous class to implement multiple interfaces, or to extend a class and implement an interface at the same time. Clients of an anonymous class can't invoke any members except those it inherits from its super type. Because anonymous classes occur in the midst of expressions, they must be kept short— about ten lines or fewer—or readability will suffer.
local classes	A local class can be declared anywhere a local variable can be declared and obeys the same scoping rules. Local classes have attributes in common with each of the other kinds of nested classes.

// Typical use of a nonstatic member class

public class MySet<E> extends AbstractSet<E> {

... // Bulk of the class omitted

public Iterator<E> iterator() {

return new MyIterator();

}

private class MyIterator implements Iterator<E>{

...

}

}

Note

If you declare a member class that does not require access to an enclosing instance, always put the static modifier in its declaration.

Summary

If a nested class needs to be visible outside of a single method or is too long to fit comfortably inside a method, use a member class. If each instance of the member class needs a reference to its enclosing instance, make it nonstatic; otherwise, make it static. Assuming the class belongs inside a method, if you need to create instances from only one location and there is a preexisting type that characterizes the class, make it an anonymous class; otherwise, make it a local class.