Estimating the income reporting function for the self-employed
AbstractThere is considerable interest in measuring the underground economy using microeconomic data. One such method estimates income under-reporting by households by assuming a known, parametric form of the Engel curve and making the further parametric assumption that households under-report their income by a constant fraction, independent of income. This paper proposes a nonparametric approach which avoids functional form restrictions and enables the reporting function to vary across income levels and household characteristics. I illustrate by estimating the effect of the Canadian Goods and Services Tax on income under-reporting.
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Bibliographic InfoArticle provided by Springer in its journal Empirical Economics.
Volume (Year): 38 (2010)
Issue (Month): 3 (June)
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Other versions of this item:
- Tedds, Lindsay, 2007. "Estimating the Income Reporting Function for the Self-Employed," MPRA Paper 4212, University Library of Munich, Germany.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
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