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Using Personal Car Register for Measuring Economic Inequality in Countries with a Large Share of Shadow Economy: Evidence for Latvia

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  • Vyacheslav Dombrovsky
  • Konstantin A. Kholodilin
  • Boriss Siliverstovs

Abstract

We suggest to use information from the state register of personal cars as an alternative indicator of economic inequality in countries with a large share of shadow economy. We illustrate our approach using the Latvian pool of personal cars. Our main finding is that the extent of household economic inequality in Latvia is much larger than officially assumed. The latest officially available estimate of the Gini coefficient is 0.36 for 2005, which is much lower than 0.55 for 2009 reported in our paper.

Suggested Citation

  • Vyacheslav Dombrovsky & Konstantin A. Kholodilin & Boriss Siliverstovs, 2011. "Using Personal Car Register for Measuring Economic Inequality in Countries with a Large Share of Shadow Economy: Evidence for Latvia," Discussion Papers of DIW Berlin 1153, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1153
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    References listed on IDEAS

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    1. McCarthy, Patrick S, 1996. "Market Price and Income Elasticities of New Vehicles Demand," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 543-547, August.
    2. Friedrich Schneider & Andreas Buehn & Claudio E. Montenegro, 2011. "Shadow Economies All Over the World: New Estimates for 162 Countries from 1999 to 2007," Chapters, in: Friedrich Schneider (ed.), Handbook on the Shadow Economy, chapter 1, Edward Elgar Publishing.
    3. Fofack, Hippolyte & Monga, Celestin, 2004. "Dynamics of income inequality and welfare in Latvia in the late 1990s," Policy Research Working Paper Series 3336, The World Bank.
    4. Bordley, Robert F & McDonald, James B, 1993. "Estimating Aggregate Automotive Income Elasticities from the Population Income-Share Elasticity," Journal of Business & Economic Statistics, American Statistical Association, vol. 11(2), pages 209-214, April.
    5. Friedrich Schneider & Andreas Buehn & Claudio Montenegro, 2010. "New Estimates for the Shadow Economies all over the World," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 443-461.
    6. Kholodilin, Konstantin A. & Siliverstovs, Boriss, 2012. "Measuring regional inequality by internet car price advertisements: Evidence for Germany," Economics Letters, Elsevier, vol. 116(3), pages 414-417.
    7. Choo, Sangho & Mokhtarian, Patricia L., 2004. "What type of vehicle do people drive? The role of attitude and lifestyle in influencing vehicle type choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(3), pages 201-222, March.
    8. Thorbecke, Erik & Charumilind, Chutatong, 2002. "Economic Inequality and Its Socioeconomic Impact," World Development, Elsevier, vol. 30(9), pages 1477-1495, September.
    9. Hess, Alan C, 1977. "A Comparison of Automobile Demand Equations," Econometrica, Econometric Society, vol. 45(3), pages 683-701, April.
    10. Schneider, Friedrich G., 2007. "Shadow Economies and Corruption All Over the World: New Estimates for 145 Countries," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 1, pages 1-66.
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    Cited by:

    1. Braguinsky, Serguey & Mityakov, Sergey, 2015. "Foreign corporations and the culture of transparency: Evidence from Russian administrative data," Journal of Financial Economics, Elsevier, vol. 117(1), pages 139-164.
    2. Michał Brzeziński & Katarzyna Sałach & Marcin Wroński, 2020. "Wealth inequality in Central and Eastern Europe: Evidence from household survey and rich lists’ data combined," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 28(4), pages 637-660, October.
    3. Michal Brzezinski & Katarzyna Sałach & Marcin Wroński, 2019. "Wealth inequality in Central and Eastern Europe: evidence from joined household survey and rich lists’ data," Working Papers 2019-09, Faculty of Economic Sciences, University of Warsaw.

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    More about this item

    Keywords

    Economic inequality; cars; social signaling; Gini index; Latvia;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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