Income underreporting by households with business income: evidence from Estonia
Merike Kukk and
Karsten Staehr ()
Post-Communist Economies, 2014, vol. 26, issue 2, 257-276
This article estimates the extent of income underreporting by households with business income relative to households of wage earners in Estonia. It uses a modified version of the methodology pioneered by Pissarides and Weber. The extent of income underreporting is estimated by comparing food Engel curves for households with and without reported business income. The baseline result is that the reported total income of households with business income above 20% of total income must be multiplied by 2.6 in order to attain the same propensity to food consumption as households of wage earners. In this sense, households with business income underreport 62% of their 'true' total income. Households with reported business income above 0 but below 20% also underreport income but to a lesser extent. The estimates are higher than those found for developed countries but consistent with other studies of unreported activities in transition countries.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: Income underreporting by households with business income. Evidence from Estonia (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:taf:pocoec:v:26:y:2014:i:2:p:257-276
Ordering information: This journal article can be ordered from
Access Statistics for this article
Post-Communist Economies is currently edited by Roger Clarke
More articles in Post-Communist Economies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().