Market consumption and hidden consumption. A test for substitutability

Bruno Chiarini and Elisabetta Marzano

Applied Economics, 2006, vol. 38, issue 6, 707-716

Abstract: In this paper an empirical analysis is performed on the relationship between private consumption and underground economy for the Italian case. It is found that private market consumption and underground (or hidden) consumption may be defined as 'complementary goods': an increase in underground consumption tends to increase family market consumption and increase its marginal utility. An implication of this result is that the nonmarket sector does not offer hedging opportunities to the consumer-worker as stressed by Busato and Chiarini's (2004) artificial economy. Moreover, wealth effects associated with a change in underground consumption are negative. A statistical model confirms this structural interpretation.

Date: 2006
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Related works:
Working Paper: Market Consumption and Hidden Consumption: A Test for Substitutability (2006)
Working Paper: Market consumpition and hidden consumption. A test for substitutability (2005)
Working Paper: MARKET COMSUMPTION AND HIDDEN CONSUMPTION. A TEST FOR SUBSTITUTABILITY (2004)
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DOI: 10.1080/00036840500396632

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