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Estimation of Unaccounted Income Using Transport as a Universal Input: A Methodological Note

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  • Mukherjee, Sacchidananda

    (National Institute of Public Finance and Policy)

  • Rao, R. Kavita

    (National Institute of Public Finance and Policy)

Abstract

There has been a lot of interest in understanding and measuring the size of unaccounted incomes in economies. There are several methods to measure size of unaccounted income (or shadow economy) - e.g., monetary approach (or currency demand approach), latent variable approach and global indicator approach. Present paper proposes an alternative method by using transport as a universal input. The method is applied to Indian data. To capture the changing structural relationship between input-output and annual volatility of demands, we tested the methodology for two successive Input-Output tables and three consecutive financial years. Since the analysis is based on assumptions, a comparative static analysis is carried out to check the sensitivity of estimates to changes in the assumptions.

Suggested Citation

  • Mukherjee, Sacchidananda & Rao, R. Kavita, 2015. "Estimation of Unaccounted Income Using Transport as a Universal Input: A Methodological Note," Working Papers 15/146, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:15/146
    Note: Working Paper 146, 2015
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    Cited by:

    1. Mukherjee, Sacchidananda, 2017. "Changing Tax Capacity and Tax Effort of Indian States in the Era of High Economic Growth, 2001-2014," Working Papers 17/196, National Institute of Public Finance and Policy.

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    Keywords

    Unaccounted income ; Under-reporting of GDP ; Road Freight Transport ; Input-Output Approach ; Diesel Adulteration ; India;
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