Do Different Estimation Methods Lead to Implausible Differences in the Size of the Non-Observed or Shadow Economies? A Preliminary Answer

Arbeitspapier

In this paper, first, six micro (4) and macro (2) estimation approaches are briefly described; they are the National Accounts Statistics discrepancy method and two new micro survey methods, a third one using a combination of company manager surveys and their knowledge to calibrate the size of the shadow economy in firms, and the consumption-income-gap of households method. The two macro methods are the MIMIC method and a structured hybrid method of the Currency demand and MIMIC models. Second, a detailed comparison of the results of four micro estimation methods with the macro MIMIC method are presented. One major result is that the estimated size of the shadow economy using the MIMIC method comes close to the size of the shadow economy of various types of recently developed micro survey methods. Third, using behavioral economics, some remarks are made about the reasons that individuals work in the shadow economy, and which estimation methods are best suited to apply this approach.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9434

Classification and Topics

• Classification: Wirtschaft ; Informal Economy; Underground Economy ; Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts ; Tax Evasion and Avoidance ; Fiscal Policies and Behavior of Economic Agents: Firm ; Illegal Behavior and the Enforcement of Law ; Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
• Subject: MIMIC estimation methods ; macro and adjusted ; micro survey method asking company managers ; micro survey method using household data ; using the consumption-income-gap ; comparison of results of size of shadow economy of mostly OECD countries ; shadow economy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schneider, Friedrich
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/248979