Estimating the Income Reporting Function for the Self-Employed

Lindsay Tedds

MPRA Paper from University Library of Munich, Germany

Abstract: There is considerable interest in measuring the underground economy using microeconomic data. One such method estimates income under-reporting by households by assuming a known, parametric form of the Engel curve and making the further parametric assumption that households under-report their income by a constant fraction, independent of income. This paper proposes a nonparametric approach which avoids functional form restrictions and enables the reporting function to vary across income levels and household characteristics. I illustrate by estimating the effect of the Canadian Goods and Services Tax on income under-reporting.

Keywords: Underground Economy; Income Under-reporting; Nonparametric Estimation; Engel Curve (search for similar items in EconPapers)
JEL-codes: C14 D12 O17 (search for similar items in EconPapers)
Date: 2007-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://mpra.ub.uni-muenchen.de/4212/1/MPRA_paper_4212.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/39784/1/MPRA_paper_39784.pdf revised version (application/pdf)

Related works:
Journal Article: Estimating the income reporting function for the self-employed (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:4212

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