An attempt to estimate the size of informal economy based on household behaviour modeling

Albu, Lucian-Liviu and Kim, Byung-Yeon and Duchene, Gerard (2002): An attempt to estimate the size of informal economy based on household behaviour modeling. Published in: Romanian Journal of Economic Forecasting , Vol. 1, : pp. 17-24.

Abstract

Having in view the three main methods for the estimation of the informal economy's size, the study focuses in the first part on data and methodological problems, trying at the same time to outline a few behavioral aspects by using only simple simulation models. Thus, based on a 288-sample and using different types of computations, the authors describe the households' participation in informal activities as varying between 20.4% and 30.6%. In the second part of the article, some more sophisticated dynamic models to simulate very complicated types of household behavior relating to participation in secondary activities and in informal economy are presented.

• Item Type: MPRA Paper
• Language: English
• Keywords: Informal Economy; Estimation; Household's Behaviour
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H31 - Household; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements

References

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Duchene, G. (coordonator), Adair, P., Albu, L.-L., Ivan-Ungureanu, C., Neff, R., and Tanase, F. (1998), “Informal economy in Romania”, ACE-Phare Project, ROSES, Paris, September.

Duchene, G., (1999), “Les revenues informels en Roumanie. Estimation par enquete”, in Revue d’etudes comparatives Est-Ouest, vol. 30, no. 4, p. 35-64.

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*** Institutul National de Statistica (2001), “Veniturile, cheltuielile si consumul populatiei in anul 2000”, Bucharest.