Online citations, reference lists, and bibliographies.

Modelling The Hidden Economy And The Tax-gap In New Zealand

D. Giles
Published 1999 · Economics

Cite This
Download PDF
Analyze on Scholarcy
Share
This paper develops and estimates a structural, latent variable, model for the hidden economy in New Zealand, and a separate currency-demand model. The estimated latent variable model is used to generate an historical time-series index of hidden economic activity, which is calibrated via the information from the currency-demand model. Special attention is paid to data non-stationarity, and to diagnostic testing. Over the period 1968 to 1994, the size of the hidden economy is found to vary between 6.8% and 11.3% of measured GDP. This, in turn, implies that the total tax-gap is of the order of 6.4% to 10.2% of total tax liability in that country. Of course, not all of this foregone revenue would be recoverable, as not all of the activity in the underground economy is responsive to changes in taxation or other policies.
This paper references
Seasonal integration and co-integration : modelling tourism demand in Singapore.
Y. Y. Chen (1996)
Me and my shadow: estimating the size
D JAigner (1988)
10.1017/CBO9780511664342
Dynamic Econometric Modeling
W. Barnett (1988)
10.1016/0304-4076(87)90085-6
FORECASTING AND TESTING IN CO-INTEGRATED SYSTEMS*
R. Engle (1987)
A new perspective on macroeconomic phenomena: the theory and measurement of the unobserved economy in the United States: causes, consequences and implications
E LFeige (1982)
Evidence of a Post-GST Increase in the Underground Economy
P. Spiro (1993)
The Hidden Economy and the Tax-Gap in New Zealand: A Latent Variable Analysis
D. Giles (1998)
Money-income causality and the New Zealand underground economy
B. Johnson (1998)
Empirical results for the size of the shadow economy of Western European countries over time
Friedrich Schneider (1997)
Measuring the hidden economy: though there be madness, yet is there method in it?
B Frey (1982)
10.1111/1468-0297.00440
Measuring the Hidden Economy: Implications for Econometric Modelling
D. Giles (1999)
10.2307/1913712
The Great Crash, The Oil Price Shock And The Unit Root Hypothesis
P. Perron (1989)
10.1007/978-1-4615-4433-3_12
Modelling the Tax Compliance Profiles of New Zealand Firms: Evidence from Audit Records
D. Giles (1998)
10.2307/1913851
STRUCTURAL EQUATION METHODS IN THE SOCIAL SCIENCES
A. Goldberger (1972)
10.2307/1271490
Handbook of applied economic statistics
E. Ziegel (2000)
10.1080/01621459.1975.10482485
Estimation of a Model with Multiple Indicators and Multiple Causes of a Single Latent Variable
K. G. Jöreskog (1975)
Lisrel 8: Structural Equation Modeling With the Simplis Command Language
K. G. Jöreskog (1993)
10.1016/0165-1765(80)90024-5
Efficient tests for normality, homoscedasticity and serial independence of regression residuals
C. Jarque (1980)
10.1111/J.1467-6419.1990.TB00088.X
COINTEGRA TION AND UNIT ROOTS
Juan J. Dolado (1990)
10.1080/758532593
The hidden economy and tax-evasion prosecutions in New Zealand
D. Giles (1997)
A New Look at the Statistical Model Identification
HIROTUGU AI AIKE
Verfahren zur Erfassung des in der Schattenwirtschaft erarbeiteten Sozialprodukts
G. Kirchgaessner (1984)
A (1998b) Measuring the hidden economy: implications for econometric modelling. Econometrics Working Paper EWP9809, Department of Economics, University of Victoria
D EGiles (1998)
10.1080/758521835
Causality between the measured and underground economies in New Zealand
D. Giles (1997)
The decline of productivity growth and the rise of the shadow economy in the U
Friedrich Schneider (1985)
10.1111/j.1475-4932.1984.tb00856.x
Issues in the Hidden Economy—A Survey*
M. Carter (1984)
10.1007/978-3-642-88408-5
The Economics of the Shadow Economy
K. Matthews (1985)
10.1080/00949659508811709
Alternative stratetgies for ‘augmenting’ the dickey-fuller test: size-robustness in the face of pre-testing
Johannah L. Dods (1995)
10.1080/135048599353609
The rise and fall of the New Zealand underground economy: are the responses symmetric?
D. Giles (1999)
10.1016/0014-2921(88)90055-4
How big is the shadow economy?: A re-analysis of the unobserved-variable approach of B.S. Frey and H. Weck-Hannemann
C. Helberger (1988)
Measuring the hidden economy: though there be madness, yet is there method in it
B SFrey (1982)
Individual income tax gap estimates for 1985 , 1988 and 1992
M JarqueC (1996)
The Learning Path of the Hidden Economy:Tax and Growth Effects in New Zealand
D. Giles (1998)
Individual income tax gap estimates for 1985
(1988)
10.1111/j.1475-4991.1984.tb00474.x
THE HIDDEN ECONOMY: STATE AND PROSPECTS FOR MEASUREMENT1
B. Frey (1984)
A new perspective on macroeconomic phenomena: the theory and measurement of the unobserved economy in the United States: causes, consequences and implications
E Feige (1982)
Estimation of regression relationships containing unobservable variables
A. Zellner (1970)
10.1007/978-94-009-5059-7
The Volume of Payments and the Informal Economy in the Netherlands 1965–1982: An attempt at quantification
W. C. Boeschoten (1984)
10.1016/0304-4076(90)90080-D
Seasonal integration and cointegration
Svend Hylleberg (1990)
Black economy' believed to exceed $100bn
(1995)
Me and my shadow: estimating the size of the hidden economy from time series data
D J Aigner (1988)
10.1109/TAC.1974.1100705
A new look at the statistical model identification
H. Akaike (1974)
10.1080/01621459.1984.10478057
Testing for Unit Roots in Seasonal Time Series
D. Dickey (1984)
10.2307/3867001
The underground economy in the United States: annual estimates
V. Tanzi (1983)
The rise and fall of the New Zealand underground economy: are the responses symmetric?.Forthcoming
E AGilesD (1999)
10.1111/j.2517-6161.1969.tb00796.x
Tests for Specification Errors in Classical Linear Least-squares Regression Analysis
J. Ramsey (1969)
SHAZAM : the econometrics computer program : version 7.0 : user's reference manual
Shazam (1993)
10.1016/0304-4076(93)01564-3
The asymptotics of single-equation cointegration regressions with I(1) and I(2) variables
N. Haldrup (1994)
10.1016/0014-2921(84)90020-5
The hidden economy as an ‘unobserved’ variable
B. Frey (1984)
10.2307/2233655
An econometric method of estimating the''hidden economy
D. Bhattacharyya (1990)
10.3726/b13748
Schattenwirtschaft: eine Möglichkeit zur Einschränkung der öffentlichen Verwaltung? Eine ökonomische Analyse
Hannelore Weck-Hannemann (1984)
10.2307/2525323
ESTIMATION OF REGRESSION RELATIONSHIPS CONTAINING UNOBSERVABLE INDEPENDENT VARIABLES
A. Zellner (1970)
10.1007/978-1-4615-4433-3_11
SIMULATING THE RELATIONSHIP BETWEEN THE HIDDEN ECONOMY AND THE TAX LEVEL AND TAX MIX IN NEW ZEALAND
P. J. Caragata (2000)
10.1017/CBO9780511664342.015
Dynamic econometric modeling: Me and my shadow: estimating the size of the U.S. hidden economy from time series data
D. Aigner (1988)
10.1093/biomet/71.3.599
Testing for unit roots in autoregressive-moving average models of unknown order
S. E. Said (1984)
Me and my shadow : estimating the size of the hidden economy from time series data
J AignerD (1988)
10.1007/BF02294361
Model selection and Akaike's Information Criterion (AIC): The general theory and its analytical extensions
H. Bozdogan (1987)
Reconciliation between personal income and taxable income, 1947-1977
T Park (1979)
10.2307/2066011
The hidden economy
E. Gross (1978)
Lisrel 8: User's Reference Guide
K. G. Jöreskog (1989)
A (1997a) The hidden economy and the tax-gap in New Zealand: a latent variable analysis. Discussion Paper 97-8, Department of Economics, University of Victoria
D EGiles (1997)
10.1198/073500102753410363
Determining the Order of Differencing in Autoregressive Processes
D. Dickey (1987)
Mimeo., University of Århus SHAZAM (1993) SHAZAM econometrics computer program: user's reference manual, version
S U. (1993)
Measuring the size of the hidden economy and the tax-gap in New Zealand: an econometric analysis
D. Giles (1995)
10.2307/3551952
Canada's Underground Economy Revisited: Update and Critique
R. Mirus (1994)
Measuring the size of the hidden economy in Canada: a latent variable/MIMIC model approach
Lindsay M. Tedds (1998)
The hidden economy and the national accounts
D. Blades (1982)
Testing the specification of regression models using Fourier approximations: the FRESET test
Linda F. Debenedictis (1996)
10.1016/0304-4076(94)90030-2
Testing for unit roots in seasonal time series: Some theoretical extensions and a Monte Carlo investigation
E. Ghysels (1994)
A (1998a) Modelling the tax compliance profiles of New Zealand firms: evidence from audit records. Econometrics Working Paper EWP9803, Department of Economics, University of Victoria
D EGiles (1998)
10.1016/0304-4076(74)90034-7
Spurious regressions in econometrics
C. Granger (1974)
10.1111/J.1475-4932.1997.TB00995.X
Testing for Asymmetry in the Measured and Underground Business Cycles in New Zealand
D. Giles (1997)



This paper is referenced by
Size and Development of the Shadow Economy in Germany and Austria: Some preliminary findings
Friedrich Schneider (2007)
Estimation of tax evasion and the effectiveness of tax collection for Thailand
Pichit Janbunjong (2009)
The Shadow Economy : An Essay
E. Schneider (2014)
Non-Observed Economy in Tourism (in Bulgarian)
Stanislav Hristov Ivanov (2003)
Tax Rates and Corruption: Labour-market and Fiscal Effects. Empirical cross-country comparisons on OECD and transition countries
M. Lackó (2004)
10.1080/00036840500426868
Size and scope of the underground economy in Germany
M. Pickhardt (2006)
Size and Development of the Shadow Economy and of Do-it-Yourself Activities: The Case of Germany
A. Buehn (2007)
10.1093/rfs/13.1.155
How Do Firms Choose Their Lenders? An Empirical Investigation
Miguel Cantillo (2000)
The Size and Development of the Shadow Economy around the World and Relation to the Hard-to-Tax
Friedrich Schneider (2003)
10.2139/ssrn.1818716
Inequality, Institutions, and Informality
A. Chong (2004)
The Shadow Economies in Middle and South America and their Influence on the Official Economy: What do we know?
Friedrich Schneider (2007)
The Shadow Economy and Work in the Shadow: What Do We (Not) Know?
Friedrich Schneider (2012)
The Size and Development of the Indian Shadow Economy and a Comparison with other 18 Asian Countries: An Empirical Investigation
Friedrich Schneider (2003)
Desigualdad, instituciones e informalidad
A. Chong (2004)
10.1080/10168737.2010.525974
New Estimates for the Shadow Economies all over the World
Friedrich Schneider (2010)
10.1007/S10797-018-9504-5
Currency demand and MIMIC models: towards a structured hybrid method of measuring the shadow economy
Piotr Dybka (2019)
An Examination Of The Size Of Personal Income Tax Gap In Kaduna State, Nigeria
A. Usman (2018)
10.1007/978-1-4614-7753-2_574
The Shadow Economy
F. Schneider (2002)
10.11648/J.IJEBO.20150302.12
The Causal Relationship Between Unemployment Rate and Underground Economy in Iran
Khossrow Piraee (2015)
Currency demandand MIMIC models: towards a structured hybrid model-based estimation of the shadow economy size
Piotr Dybka (2017)
The Size of the Underground Economy: A Review of the Estimates
S. Easton (2001)
10.2139/ssrn.2705879
Reflections on the Meaning and Measurement of Unobserved Economies: What Do We Really Know About the 'Shadow Economy'
E. Feige (2016)
10.1080/00036840110018720
The learning path of the hidden economy: the tax burden and tax evasion in New Zealand
D. Giles (2001)
10.1016/J.JOEP.2008.06.002
Consumer decisions in the black market for stolen or counterfeit goods
Luca Casola (2009)
To be or not to be informal?: A Structural Simulation
J. M. Vargas (2012)
10.1515/peps-2013-0059
The Shadow Economy in Colombia: Size and Effects on Economic Growth
Friedrich Schneider (2014)
THE VALUE ADDED OF UNDERGROUND ACTIVITIES: SIZE AND MEASUREMENT OF THE SHADOW ECONOMIES OF 110 COUNTRIES ALL OVER THE WORLD* )
Friedrich Schneider (2002)
10.5018/economics-ejournal.ja.2007-5
Shadow Economies and Corruption All Over the World: What Do We Really Know?
Friedrich Schneider (2006)
Essays on Tax Evasion
Edward B. Sennoga (2007)
10.1080/00036846.2016.1267844
Unemployment and the shadow economy
Ignacio Mauleón (2017)
Estimating the Underground Economy and Tax Evasion: Cointegration and Causality Evidence in the Case of Cyprus, 1960-2003
Meryem Duygun Fethi (2004)
Revisiting the relationship between unemployment rate and the size of the shadow economy for United States using Johansen approach for cointegration
A. Alexandru (2010)
See more
Semantic Scholar Logo Some data provided by SemanticScholar