A Fuzzy Logic Approach to Modelling the Underground Economy
The availability of data for the size of the "Underground Economy" is important for macroeconomic policy. We use fuzzy set theory and fuzzy logic to construct an annual time-series for the (unobservable) New Zealand underground economy over the period 1968 to 1994. Two input variables are used - the effective tax rate and an index of the degree of regulation. The resulting underground economy time-series is compared with one previously constructed by the second author using a structural "Multiple Indicators, Multiple Causes" (MIMIC) model. The two approaches each yield sensible, but somewhat different, pictures of the New Zealand underground economy over this period. The fuzzy logic approach to this measurement problem involves several subjective judgements, but our results are quite robust to these choices.
|Date of creation:||23 Jul 1999|
|Date of revision:|
|Contact details of provider:|| Postal: PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2|
Web page: http://web.uvic.ca/econ
More information through EDIRC
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.:
- Gregory Richardson, 1998. "The structure of fuzzy preferences: Social choice implications," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 15(3), pages 359-369.
- David E. A. Giles, & Patrick J. Caragata, 1999.
"The Learning Path of the Hidden Economy: The Tax Burden and Tax Evasion in New Zealand,"
Econometrics Working Papers
9904, Department of Economics, University of Victoria.
- David Giles & Patrick Caragata, 2001. "The learning path of the hidden economy: the tax burden and tax evasion in New Zealand," Applied Economics, Taylor & Francis Journals, vol. 33(14), pages 1857-1867.
- David E. A. Giles, 1999.
"Modelling the hidden economy and the tax-gap in New Zealand,"
Springer, vol. 24(4), pages 621-640.
- David E. A. Giles, 1999. "Modelling the Hidden Economy and the Tax-Gap in New Zealand," Econometrics Working Papers 9905, Department of Economics, University of Victoria.
- David E. A. Giles, 1998. "Modelling the Hidden Economy and the Tax-Gap in New Zealand," Econometrics Working Papers 9810, Department of Economics, University of Victoria.
- Patrick J. Caragata, & David E. A. Giles, 1998. "Simulating the Relationship Between the Hidden Economy and the Tax Level and Tax Mix in New Zealand," Econometrics Working Papers 9804, Department of Economics, University of Victoria.
- Lindstrom, Tomas, 1998. "A fuzzy design of the willingness to invest in Sweden," Journal of Economic Behavior & Organization, Elsevier, vol. 36(1), pages 1-17, July.
When requesting a correction, please mention this item's handle: RePEc:vic:vicewp:9909. 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: (David Giles)
If references are entirely missing, you can add them using this form.