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The Size of Informal Economy and Demand Elasticity Estimates Using Full Price Approach: A Case Study for Turkey

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  • Armagan Tuna Aktuna-Gunes

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • François Gardes

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Christophe Starzec

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this article, the size of informal economy is measured by using the full price method proposed by Gardes F. (2014). As an extension of this method, price elasticities are re-estimated by integrating the underreported earning shares both for wage workers and self-employers from cross-sectional data covering 2003-2006 in Turkey. The contribution of this paper is threefold: The size of informal economy is estimated by a statistical matching of the Turkish Family Budget and Time Use surveys through a complete demand system including full prices. Second, more accurate price and income elasticities are estimated by using the monetary incomes from informal activities for an emerging economy such as Turkey. Third, extended full price estimation of demand elasticities allow us to discover for which consumption group households are more likely to engage in informal work.

Suggested Citation

  • Armagan Tuna Aktuna-Gunes & François Gardes & Christophe Starzec, 2014. "The Size of Informal Economy and Demand Elasticity Estimates Using Full Price Approach: A Case Study for Turkey," Post-Print halshs-01149595, HAL.
    • Handle: RePEc:hal:journl:halshs-01149595
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01149595
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    References listed on IDEAS

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    1. Pashardes, Panos, 1993. "Bias in Estimating the Almost Ideal Demand System with the Stone Index Approximation," Economic Journal, Royal Economic Society, vol. 103(419), pages 908-915, July.
    2. Armagan Tuna Aktuna-Gunes & Christophe Starzec & François Gardes, 2014. "Une évaluation de la taille de l'économie informelle par un système complet de demande estimé sur données monétaires et temporelles," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00973494, HAL.
    3. Armagan T. Aktuna-Gunes & Christophe Starzec & François Gardes, 2014. "Une évaluation de la taille de l'économie informelle par un système complet de demande estimé sur données monétaires et temporelles," Revue économique, Presses de Sciences-Po, vol. 65(4), pages 567-589.
    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. Armagan Tuna Aktuna-Gunes & Christophe Starzec & François Gardes, 2014. "Une évaluation de la taille de l'économie informelle par un système complet de demande estimé sur données monétaires et temporelles," Post-Print halshs-00973494, HAL.
    6. Armagan Tuna Aktuna-Gunes & Christophe Starzec & François Gardes, 2014. "Une évaluation de la taille de l'économie informelle par un système complet de demande estimé sur données monétaires et temporelles," Documents de travail du Centre d'Economie de la Sorbonne 14018, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    7. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
    8. Armagan Tuna Aktuna Gunes & Christophe Starzec & François Gardes, 2014. "Une évaluation de la taille de l'économie informelle par un système complet de demande estimé sur données monétaires et temporelles," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01072506, HAL.
    9. Duncan, G.J. & Gardes, F. & Gaubert, P. & Starzec, C., 1998. "A Comparison of Consumption Models Estimated on American and Polish Panel and Pseudo-Panel Data," Papiers du Laboratoire de Microéconomie Appliquée 1998-09, Université Panthéon-Sorbonne (Paris 1).
    10. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
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    Cited by:

    1. Armagan Tuna Aktuna-Gunes, 2015. "Domestic activity patterns pertaining to households and informality in Turkey," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01161874, HAL.
    2. Armagan Tuna Aktuna-Gunes, 2015. "Domestic activity patterns pertaining to households and informality in Turkey," Post-Print halshs-01161874, HAL.
    3. Armagan Tuna Aktuna-Gunes, 2015. "Domestic activity patterns pertaining to households and informality in Turkey," Documents de travail du Centre d'Economie de la Sorbonne 15018, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

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    More about this item

    Keywords

    informal economy; complete demand system; full prices; demand elasticity; économie informelle; système complet de demande; prix complets; élasticités de demande;
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