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Shedding light on the shadow economy : a nighttime light approach

Listed author(s):
  • Tanaka, Kiyoyasu
  • Keola, Souknilanh

Measuring the shadow economy is inherently difficult, but critical for understanding economic development. Using census data on formal and informal sectors in Cambodia, we document that 96.6% of non-farm establishments do not formally register with the government, and their sales accounted for 76.6% of total sales in 2011. We estimate a relationship between nighttime light and sales across regions separately for formal and informal firms for 2011, and estimate their past sales from changes in nighttime light for 1993-2010. Both formal and informal firms increased their estimated sales, and the share of informal sales increased from 68.8% in 1993 to 76.6% in 2011, suggesting that the informal sector increased quantitatively in both absolute and relative terms throughout the economic development of the Cambodian economy.

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Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 531.

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Date of creation: 01 Aug 2015
Publication status: Published in IDE Discussion Paper = IDE Discussion Paper, No. 531. 2015-08-01
Handle: RePEc:jet:dpaper:dpaper531
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