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Modeling the Underground Economy in Turkey: Randomized Response and MIMIC Models

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  • Fatih Savasan

    (Afyon Kocatepe University)

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    Abstract

    MIMIC model and two versions of the Randomized Response (RR) Technique are employed to estimate the size of the underground economy (UE) in Turkey. The RR estimate for 1998 is 28% of ‘measured’ GDP. Over the period from 1970 to 1998, the size of the UE is found to vary between 10% and 45%. The UE faces big drop in the mid-1980s, implying the importance of structural changes in the Turkish economy in reducing the size of UE. All types of burden imposed by government are found to be positively related to the UE. Tax-gap issue is also addressed.

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    Bibliographic Info

    Article provided by Missouri Valley Economic Association in its journal The Journal of Economics.

    Volume (Year): 29 (2003)
    Issue (Month): 1 ()
    Pages: 49-76

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    Handle: RePEc:mve:journl:v:29:y:2003:i:1:p:49-76

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    Cited by:
    1. Roberto Dell'Anno & Ferda Halicioglu, 2010. "An ARDL model of unrecorded and recorded economies in Turkey," Journal of Economic Studies, Emerald Group Publishing, vol. 37(6), pages 627-646, September.
    2. Karanfil, Fatih & Ozkaya, Ata, 2007. "Estimation of real GDP and unrecorded economy in Turkey based on environmental data," Energy Policy, Elsevier, vol. 35(10), pages 4902-4908, October.
    3. Fatih Karanfil, 2011. "Environmental regulation in the presence of unrecorded economy," Economie Internationale, CEPII research center, issue 126-127, pages 91-108.
    4. Karanfil, Fatih, 2008. "Energy consumption and economic growth revisited: Does the size of unrecorded economy matter?," Energy Policy, Elsevier, vol. 36(8), pages 3019-3025, August.

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