Economic Crisis's Influence over the Quantification of Puerto Rico's Shadow Economy: Parsimonious Econometric Proposal

Journal of Applied Business and Economics

Posted: 12 Apr 2019

Date Written: November 30, 2017

Abstract

This work proposes a model based on econometric technics, which through the use of Partial Least Squares-Structural Equation Modeling (PLS-SEM) achieves the quantification of Puerto Rico's shadow economy in 2014. Using structural and internal consistency quality measures for reflective as for formative variables, the econometric model is optimized. The selected model with the best overall measures was denominated as MIMIC_UNE (6-2-1-3). This study has found that for 2014, the informal economy in Puerto Rico is of the order of 36.47% of the GDP, as the fact that it has been rising since 2000 up until this study's date.

Keywords: Econometric technis, PLS-SEM, Shadow economy, Puerto Rico, MIMIC models

Suggested Citation

Castro-Gonzáles, Segundo, Economic Crisis's Influence over the Quantification of Puerto Rico's Shadow Economy: Parsimonious Econometric Proposal (November 30, 2017). Journal of Applied Business and Economics, Available at SSRN: https://ssrn.com/abstract=3355068

Segundo Castro-Gonzáles (Contact Author)

IEN Business School; Universidad del Este ( email )

Carretera 190, Km. 1.8
Barrio Sabana Abajo
Carolina, Puerto Rico, 00984
Puerto Rico
787-923-6372 (Phone)

HOME PAGE: http://www.suagm.edu/une/

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