Australia's Cash Economy: Are the Estimates Credible?
Trevor Breusch ()
The Economic Record, 2005, vol. 81, issue 255, 394-403
Abstract:
The method of ‘excess sensitivity’ of Bajada (1999, 2000, 2001) indicates a large underground economy in Australia, with estimates of unrecorded income approximately 15 per cent of official gross domestic product. These estimates concern policy‐makers, especially those agencies responsible for national accounts, tax collection, economic stabilisation and law enforcement. We show that the method exhibits a severe form of non‐robustness, in which the results change markedly with a simple change in the units of measurement of the variables. There is a separate problem in which a key parameter is set to an unrealistic value that makes the estimates many times too high.
Date: 2005
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https://doi.org/10.1111/j.1475-4932.2005.00277.x
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Working Paper: Australia's Cash Economy: Are the estimates credible? (2005)
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