IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Estimating The Size of Turkey’s Informal Sector: An Expenditure Based Approach

Listed author(s):
  • Nurhan Davutyan

    ()

    (Dept. of Economics & Dept. of Industrial Engineering, Marmara University)

How extensive is the Turkish unofficial economy? An accurate answer to this question has considerable practical significance for various aspects of economic policy – particularly employment, fiscal and migration policies. Estimates based on macroeconomic data tend to be too imprecise. We utilize the most up to date household income and expenditure surveys to examine the extent of income underreporting among members of Turkey’s unofficial economy. The Pissarides-Weber (1989) approach that we use, hypothesizes that survey data would reflect income underreporting in the informal sector as “excess food consumption.” Since it relies on “marginal propensity to consume food”, this method allows comparisons across time and space, via Engel’s Law. Our results suggest that informal sector members spend more than their formal sector counterparts with the same level of reported income. Based on this information, we estimate the average size of the true informal sector income to be about 1.25 times the reported one. This implies the Turkish disposable income is (25%)*(83%) or about 21% larger than the official estimate based on reported magnitudes.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://erf.org.eg/wp-content/uploads/2016/04/403.pdf
Download Restriction: no

File URL: http://bit.ly/2nZmgh7
Download Restriction: no

Paper provided by Economic Research Forum in its series Working Papers with number 403.

as
in new window

Length: 18
Date of creation: 03 Jan 2008
Date of revision: 03 Jan 2008
Publication status: Published by The Economic Research Forum (ERF)
Handle: RePEc:erg:wpaper:403
Contact details of provider: Postal:
21 Al-Sad Al Aaly St. Dokki, Giza

Phone: 202-3370810
Fax: 202-3616042
Web page: http://www.erf.org.eg
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Fethi Ogunc & Gokhan Yilmaz, 2000. "Estimating The Underground Economy In Turkey," Discussion Papers 0004, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  2. Friedrich Schneider & Dominik Enste, 1999. "Shadow Economies Around the World - Size, Causes, and Consequences," CESifo Working Paper Series 196, CESifo Group Munich.
  3. André Sapir, 2006. "Globalization and the Reform of European Social Models," Journal of Common Market Studies, Wiley Blackwell, vol. 44(2), pages 369-390, 06.
  4. Pissarides, Christopher A. & Weber, Guglielmo, 1989. "An expenditure-based estimate of Britain's black economy," Journal of Public Economics, Elsevier, vol. 39(1), pages 17-32, June.
  5. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 77-114, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:erg:wpaper:403. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Namees Nabeel)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.