AN ATTEMPT TO ESTIMATE THE SIZE OF INFORMAL ECONOMY BASED ON HOUSEHOLD BEHAVIOUR MODELING*

Abstract

Having in view the three main methods for the estimation of the informal economy's size, the study focuses in the first part on data and methodological problems, trying at the same time to outline a few behavioral aspects by using only simple simulation models. Thus, based on a 288-sample and using different types of computations, the authors describe the households' participation in informal activities as varying between 20.4% and 30.6%. In the second part of the article, some more sophisticated dynamic models to simulate very complicated types of household behavior relating to participation in secondary activities and in informal economy are presented.
* (Paper prepared on the basis of research within two Phare ACE Programmes 1996 and 1998, respectively ("The informal economy in Romania" and "Household informal economy activities in candidate countries: size, determinants and implications for the enlargement - empirical evidence from Romania and Bulgaria"). The views expressed here do not necessarily reflect the European Union's view). 

Key words: informal economy, estimation, household's behaviour
JEL Classification: H31, C51, O17