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How Reliable are the Estimates of the Underground Economy?

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  • Christopher Bajada

    (University of Technology, Sydney)

Abstract

Economists have proposed several different econometric techniques for measuring the underground economy but these estimates have varied widely and have cast doubts on their credibility and usefulness. This paper describes a dynamic bootstrap routine for constructing confidence intervals for these estimates. This approach avoids the need for subjective opinion on the relative merit of each technique and offers a way to assess the reliability of the various econometric methodologies that have been used.

Suggested Citation

  • Christopher Bajada, 2002. "How Reliable are the Estimates of the Underground Economy?," Economics Bulletin, AccessEcon, vol. 3(14), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-02c10002
    as

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    File URL: http://www.accessecon.com/pubs/EB/2002/Volume3/EB-02C10002A.pdf
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    References listed on IDEAS

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    1. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589833.
    2. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589819.
    3. Philip Cagan, 1958. "The Demand for Currency Relative to Total Money Supply," NBER Chapters, in: The Demand for Currency Relative to Total Money Supply, pages 1-37, National Bureau of Economic Research, Inc.
    4. Feige,Edgar L. (ed.), 1989. "The Underground Economies," Cambridge Books, Cambridge University Press, number 9780521262309.
    5. Bajada, Christopher, 1999. "Estimates of the Underground Economy in Australia," The Economic Record, The Economic Society of Australia, vol. 75(231), pages 369-384, December.
    6. Edgar L. Feige, 1979. "How Big Is the Irregular Economy?," Challenge, Taylor & Francis Journals, vol. 22(5), pages 5-13, November.
    7. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589826.
    8. Thomas, Jim, 1999. "Quantifying the Black Economy: 'Measurement without Theory' Yet Again?," Economic Journal, Royal Economic Society, vol. 109(456), pages 381-389, June.
    9. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July.
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    Cited by:

    1. Paraskevi Koufopoulou & Colin C. Williams & Athanassios Vozikis & Kyriakos Souliotis, 2019. "Shadow Economy: Definitions, terms & theoretical considerations," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 9(5), pages 1-3.

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    More about this item

    Keywords

    bootstrap;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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