Australia's Cash Economy: Are the estimates credible?

Preprint
Publisher Website
Google Scholar
  • 1 January 2005
    • preprint
      • Published in RePEc
Abstract
The method of "excess sensitivity" of Bajada (1999, 2001, 2002) indicates a large underground economy in Australia, with estimates of unrecorded income around 15 per cent of official GDP. These estimates concern policymakers, especially those agencies responsible for national accounts, tax collection, economic stabilization 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.
All Related Versions

This publication has 0 references indexed in Scilit: