Shedding light on the shadow economy: a nighttime light approach

Kiyoyasu Tanaka and Souknilanh Keola

No 531, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Measuring the shadow economy is inherently difficult, but critical for understanding economic development. Using census data on formal and informal sectors in Cambodia, we document that 96.6% of non-farm establishments do not formally register with the government, and their sales accounted for 76.6% of total sales in 2011. We estimate a relationship between nighttime light and sales across regions separately for formal and informal firms for 2011, and estimate their past sales from changes in nighttime light for 1993-2010. Both formal and informal firms increased their estimated sales, and the share of informal sales increased from 68.8% in 1993 to 76.6% in 2011, suggesting that the informal sector increased quantitatively in both absolute and relative terms throughout the economic development of the Cambodian economy.

Keywords: Cambodia; Employment; Informal sector; Informal employment; Satellite data (search for similar items in EconPapers)
JEL-codes: E26 H26 O17 (search for similar items in EconPapers)
Date: 2015-08-01
New Economics Papers: this item is included in nep-iue and nep-sea
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Citations: View citations in EconPapers (7)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 531. 2015-08-01

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Related works:
Journal Article: Shedding Light on the Shadow Economy: A Nighttime Light Approach (2017)
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