Method Of Statistical Estimates Of The Size Of The Underground Economy - The Underground Economies Of Scale Empirical Analysis

The study of "underground economy" started from the Second World War, till 1958 Cagan set up a simple "cash ratio model" and got the rough estimation of the "tax evasion". In 1970's and 1980"s many scientists deeply studied it again, for example Gutmann and Feige etc. Based on the "Rent seeking" theory and "DUP" theory, Buchanan won the Nobel Prize in economics in 1987.In China, the study of "underground economy" is very late. In recent years, some economists evaluated western "underground economy" theory , introduced some western country's status of it, and did some research work of China's "underground economy" in the scale, forms, reasons and countermeasures, but the results are not systematic. As a new realm of economics, the underground economics directly influences "social resources distribution"-one of the most important issues of economics, and puts forward some positive suspicion to the economic information--the basis of traditional economics' quantitative analysis. Studying the scale of underground economy has direct relation to the degree of "information distortion", so it has been a most important parameters in macroeconomic theoretical analysis.Actually, after China has carried out reform and open policy, our national economy developed very fast. However, the underground economic activities in the field of productive material, service, capital, technology, information, culture, land etc. is very rampant. There were so many fakes and inferior goods in society, and many officials bucked for private profit by using their privilege. A lot of traders managed their business without any licenses, and tax dodging and tax evasion were very popular. The price system was very disordered. Therefore, the mixed underground economy made the government cannot get the information of national economy, and cannot set up macroeconomic policy and check up how the policy was executed. Gigantic underground economy destroyed the principle of distributing social resources, and it influenced the circulation of social economy, it also resulted in the miss of revenues and influenced the income of national finance. Furthermore it corrupted the officials, and blocked the development of reform and open policy.This thesis has five parts:The first part: the summary of underground economy. After introducing the meaning, definition and classification of "underground economy", I explain the relations between underground economy and GDP, thereby, elucidate the significance of studying it.The second part: the status of China's underground economy. Discussing the forms, reason and conditions, operating characteristic of our underground economy.The third part: the estimate measure of the underground economy. Two methods of direct investigation: freewill investigation and tax check-up; Four methods of differentia measurement: income-outcome difference, labour participation ratio model, currency measurement (cash ratio model and exchange model) and regression model.After that I give some suitable evaluation to all the measurements.The fourth part: positively analyzing the scale of China's underground economy.Using "income-outcome difference model" to estimate the scale of China's underground economy;Using "labour participation ratio model" to estimate the scale of China's underground economy;After revise the cash ratio model, I estimate the scale of China's underground economy from 1979 to 1999, and do some keenness analysis.The fifth part: interpret some consideration of the scale of China's underground economy.First I bring forward my understanding of the scale of China's underground economy, and introduce the rational scale theory, discuss the macroeconomic countermeasure.