Comment on Feige's Paper "Reflections on the Meaning and Measurement of Unobserved Economies: What Do We Really Know About the 'Shadow Economy'?

Authors

  • Friedrich Schneider Department of Economics, Johannes Kepler University of Linz, Linz, Austria

Abstract

This comment provides a reply to Prof. Feige’s paper with the title “Reflections on the Meaning and Measurement of Unobserved Economies: What do we really know about the ‘Shadow Economy’?”, in which Prof. Feige heavily criticizes me. I show that the same critique which Prof. Feige raises against me can be put forward to his results on the non-observed economy. Moreover, I show that my dataset is appropriately documented, and I also address the problem of calibration and normalization issues when undertaking a MIMIC estimation. In the concluding section, I suggest that a joint paper should be written in which all the pros and cons of each method of estimating the size and development of the non-observed/shadow economy are presented and criticized.

References

Bajada, C. and Schneider, F. (2005). The Shadow Economies of the Asia-Pacific. Pacific Economic Review, 10(3), 379-401.

Breusch, T. (2005). Estimating the Underground Economy using MIMIC Models, Australian National University. Working Paper, Canberra. Retrieved from: http://econ.unimelb.edu.au/SITE/workshops/Breusch.pdf.

Dell’Anno, R. and Schneider, F. (2003). The Shadow Economy of Italy and other OECD countries: What do we know? Journal of Public Finance and Public Choice, 21(2-3), 97-120.

Enste, D.H. and Schneider, F. (2006). Welchen Umfang haben Schattenwirtschaft und Schwarzarbeit? Ein Versuch zur Lösung des Rätsels, Wirtschaftsdienst, 2006/3, 185-191.

Feige, E.L. (2016). Reflections on the Meaning and Measurement of Unobserved Economies: What do we really know about the “Shadow Economy”? Journal of Tax Administration, 1/2016.

Feige, E.L. and Urban, I. (2008). Measuring Underground (Unobserved, Non-Observed, Unrecorded) Economies in Transition Countries: Can We Trust GDP? Journal of Comparative Economics, 36(2), 287-306.

Feld, L.P. and Larsen, C. (2005). Black Activities in Germany in 2001 and 2004: A Comparison Based on Survey Data, Study Nr. 12. Copenhagen: The Rockwool Foundation Research Unit.

Feld, L.P. and Larsen, C. (2012a). Undeclared Work, Deterrence and Social Norms: The Case of Germany. Berlin/Heidelberg: Springer-Verlag.

Feld, L.P. and Larsen, C. (2012b). Self-Perceptions, Government Policies and Tax Compliance in Germany. International Tax and Public Finance, 19, 78-103.

Kazemier, B. (2006). Monitoring the Underground Economy: A Survey of Methods and Estimates. In Schneider, F. and D. Enste (Eds.), Jahrbuch Schattenwirtschaft 2006/07. Zum Spannungsfeld von Politik und Ökonomie, (pp. 11-53). Berlin: LIT Verlag.

OECD, Organization for Economic Co-operation and Development. (2002). Measuring the Non-Observed Economy: A Handbook (pp.1-249). Paris, France: OECD Publications Service. 1-249.

Pedersen, S. (2003). The Shadow Economy in Germany, Great Britain and Scandinavia. Copenhagen: The Rockwool Foundation Research Unit.

Schneider, F. (2015). Schattenwirtschaft und Schattenarbeitsmärkte: Die Entwicklung der letzten 20 Jahre. Perspektiven der Wirtschaftspolitik (PWP), 16(1), 3-25.

Schneider, F. and Enste, D. (2000). Shadow economies: Size, causes and consequences. Journal of Economic Literature, 38/1, 73-110.

Schneider, F. and Williams, C.C. (2013). The Shadow Economy. London: Institute for Economc Affairs (IEA).

Schneider, F., Buehn, A. and Montenegro, C.E. (2010). New Estimates for the Shadow Economies all over the World. International Economic Journal, 24/4, 443-461.

Schneider, F., Krstić, G., Arsić, M. and Randelović, S. (2015). What Is the Extent of the Shadow Economy in Serbia? In G. Krstić, and F. Schneider (Eds.), Formalizing the Shadow Economy in Serbia, (pp. 47-76). Heidelberg: Springer-Verlag.

Thomas, J.J. (1992). Informal Economic Activity. Ann Arbor: The University of Michigan Press.

UN, United Nations Economic Commission for Europe (2008). Non-Observed Economy in national Accounts: Survey of Country Practices (pp.1-340).Geneva, Switzerland.

Williams, C.C. and Schneider, F. (2016). Measuring the Global Shadow Economy: The Prevalence of Informal Work and Labour. Cheltenham (UK): Edward Elgar Publishing.

Volume 2.2 of JOTA - Schneider Cover

Downloads

Published

31-10-2016

How to Cite

Schneider, F. (2016). Comment on Feige’s Paper "Reflections on the Meaning and Measurement of Unobserved Economies: What Do We Really Know About the ’Shadow Economy’?. Journal of Tax Administration, 2(2), 82–92. Retrieved from https://jota.website/jota/article/view/129