ABSTRACT
There appears to be a number of broad categories into which the attempts to measure the underground economy fall. Although each approach differs from application to application, the underlying conclusions from the majority of these studies are that the underground economy worldwide has been growing over time. Our objective is to review these methodologies and to identify the advantages or disadvantages of each. These methodologies may be grouped loosely as follows:
Voluntary Survey and Samples
Using this approach for estimating the size of the underground economy, individuals are interviewed and asked whether they have actively participated in the underground economy. Some surveys take the form of direct contact between the interviewer and the respondents selected for the survey. In other surveys the respondents are requested to complete a questionnaire and to mail back their responses. Other surveys use combinations of the two methods for eliciting information. Typically the questions may specifically ask the respondent if they acted as a buyer or seller in the underground economy. Others may use more indirect questioning in an attempt to overcome the bias in responses that result from directly asking the respondent whether they have failed to meet their tax obligations.
