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Measuring misreporting at customs

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  • Al Wazzan, Lynn
  • Grether, Pablo
  • Olarreaga, Marcelo

Abstract

Trade economists measure misreporting at the importer’s customs by comparing the export value reported at the exporter’s customs with the import value reported at the importer’s customs. The more significant the gap, the larger the extent of misreporting by the importer motivated by incentives to under-invoice to avoid customs taxes. This approach assumes that export data reported is correctly reported, which may be a strong assumption depending on the exporter. We provide a simple method to correct for misreporting by exporters and find that it matters.

Suggested Citation

  • Al Wazzan, Lynn & Grether, Pablo & Olarreaga, Marcelo, 2023. "Measuring misreporting at customs," Economics Letters, Elsevier, vol. 229(C).
    • Handle: RePEc:eee:ecolet:v:229:y:2023:i:c:s0165176523002574
    DOI: 10.1016/j.econlet.2023.111232
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    References listed on IDEAS

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    1. Javorcik, Beata S. & Narciso, Gaia, 2008. "Differentiated products and evasion of import tariffs," Journal of International Economics, Elsevier, vol. 76(2), pages 208-222, December.
    2. Beverelli, Cosimo & Ticku, Rohit, 2022. "Reducing tariff evasion: The role of trade facilitation," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 534-554.
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    6. Demir, Banu & Javorcik, Beata, 2020. "Trade policy changes, tax evasion and Benford's law," Journal of Development Economics, Elsevier, vol. 144(C).
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    Keywords

    Customs misreporting;

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