Settore sommerso e politiche di emersione: un approccio stocastico

Marisa Cenci () and Margherita Scarlato

No 23, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: The aim of this paper is to analyse the role of uncertainty in shaping the behavior of firms in the underground economy. Following the "option value" approach, we present a dynamic model which captures (1) the irreversibility of reallocation decisions when stochastic shocks can change substantially the net present returns in both the legal and the underground sectors. This model allows us to draw a number of interesting policy implications. Last we use our theoretical results to address the specific issues that arise in the case of the Mezzogiorno of Italy. We show that our framework provides some insights that could br fruitfully considered in the current discussion on the appropriate interventions to reduce the size of the underground economy in the Italian southern regions.

Keywords: decision making under uncertainty; underground economy; stochastic models; stochastic programming (search for similar items in EconPapers)
JEL-codes: D81 O17 (search for similar items in EconPapers)
Pages: 30
Date: 2001-12
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Related works:
Working Paper: Settore sommerso e politiche di emersione: un approccio stocastico (2004)
Journal Article: Settore sommerso e politiche di emersione: un approccio stocastico (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:rtr:wpaper:0023

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