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Are Underground Workers More Likely to be Underground Consumers? Author info | Abstract | Publisher info | Download info | Related research | Statistics Fortin, Bernard
Lacroix, Guy
Montmarquette, Claude
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We investigate the impact of working in the underground sector on the demand for underground commodities. Using a tax evasion model with costly information, we show that the presence of a network effect encourages underground workers to purchase underground commodities. The model is estimated using a unique Canadian microdata set for 1993. An increase in underground hours of work has a strong positive effect on the probability of purchasing underground commodities and on the level of expenditures. This relationship has a sizable effect on the impact of tax and enforcement parameters on the level of the underground economy.
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Article provided by Royal Economic Society in its journal The Economic Journal .
Volume (Year): 110 (2000)
Issue (Month): 466 (October)
Pages: 838-60
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Handle: RePEc:ecj:econjl:v:110:y:2000:i:466:p:838-60Contact details of provider: Web page: http://www.res.org.uk/ More information through EDIRC
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