Implausible Large Differences in the Sizes of Underground Economies in Highly Developed European Countries? A Comparison of Different Estimation Methods

27 Pages Posted: 12 Jul 2017

See all articles by Friedrich Schneider

Friedrich Schneider

Johannes Kepler University Linz - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Date Written: June 14, 2017

Abstract

In this paper, first, the MIMIC estimation method is described and criticized and due to a double counting problem a correction is suggested. Second, the measurement methods used for National Accounts Statistics – the discrepancy method and two new micro survey methods – are described and a third, a micro method, using a combination of company manager surveys and their knowledge to calibrate the size of the shadow economy in firms, is presented, too. Third, a detailed comparison of the four micro estimation methods with the MIMIC and the corrected MIMIC method are presented. One major result is that the corrected MIMIC method, especially, comes quite close to various types of lately developed micro survey methods.

Keywords: MIMIC Estimation Methods, Macro and Adjusted, Micro Survey Method Asking Company Managers, Micro Survey Method Using Households' Data, Using the Consumption-Income-Gap, Comparison of Results of Size of Shadow Economy of European Countries, Shadow Economies

JEL Classification: E260, E010, H260, H320, K420, P240, O170

Suggested Citation

Schneider, Friedrich G., Implausible Large Differences in the Sizes of Underground Economies in Highly Developed European Countries? A Comparison of Different Estimation Methods (June 14, 2017). CESifo Working Paper Series No. 6522, Available at SSRN: https://ssrn.com/abstract=2999761

Friedrich G. Schneider (Contact Author)

Johannes Kepler University Linz - Department of Economics ( email )

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