Informal Markets, Domestic Production and Demand Elasticities: A Case of Study for Turkey

Armagan Tuna Aktuna-Gunes (), François Gardes () and Christophe Starzec ()
Additional contact information
Armagan Tuna Aktuna-Gunes: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
François Gardes: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Christophe Starzec: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: In this article, the size of informal economy is measured using an estimation of demand system including both monetary incomes and incomes from domestic production based on cross-sectional data covering 2003–2006 period in Turkey. Combining these two sources of income allows the computation of proxies of full prices at the individual level. The estimation of this demand system including resources from domestic production increases significantly the evaluated size of informal economy by one third. The full price elasticities estimated with respect to these proxies can be decomposed into time and monetary components. Estimates of the elasticities with respect to monetary prices and time-costs are significantly negative for all types of expenditures, so that economic policies can be efficiently applied to a taxation of monetary values using the estimates of those elasticities over sub-populations rather than elasticities computed on macro-data. Time-cost elasticities are shown to be larger in absolute value than their monetary price counter-part while for income effects the time-ressource elasticities are lower in absolute value than the monetary income ones. These results are important for public policy concerning informal work, showing a large difference in the substitution effect between time and money among household participating or not participating in informal activities.

Keywords: Economy (search for similar items in EconPapers)
Date: 2017-07-02
References: Add references at CitEc
Citations:

Published in Economics Bulletin, 2017, 37 (3), pp.1496-1513

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-01478059

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().