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Settore sommerso e politiche di emersione: un approccio stocastico

Author

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  • Marisa Cenci
  • Margherita Scarlato

Abstract

The aim of this paper is to analyse the role of uncertainty in shaping the behavior of firms in the underground economy. Following the "option value" approach, we present a dynamic model which captures (1) the irreversibility of reallocation decisions when stochastic shocks can change substantially the net present returns in both the legal and the underground sectors. This model allows us to draw a number of interesting policy implications. Last we use our theoretical results to address the specific issues that arise in the case of the Mezzogiorno of Italy. We show that our framework provides some insights that could br fruitfully considered in the current discussion on the appropriate interventions to reduce the size of the underground economy in the Italian southern regions.

Suggested Citation

  • Marisa Cenci & Margherita Scarlato, 2001. "Settore sommerso e politiche di emersione: un approccio stocastico," Departmental Working Papers of Economics - University 'Roma Tre' 0023, Department of Economics - University Roma Tre.
    • Handle: RePEc:rtr:wpaper:0023
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    Cited by:

    1. Maria Felice Arezzo, 2014. "Il lavoro irregolare nelle regioni italiane: un?analisi econometrica dal 1995 al 2008," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2014(1), pages 60-77.

    More about this item

    Keywords

    decision making under uncertainty; underground economy; stochastic models; stochastic programming;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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