Size, Causes and Consequences of the Underground Economy

Chapter 8The Shadow Economy in Norway 1980-2003: Some Empirical Evidences from Voluntary Sample Surveys

Kari Due Andresen, Tone Ognedal and Steinar Strøm

Introduction

Shadow economy activity with a focus on tax evasion has attracted the attention of economist for a long time, starting with Cagan (1958) who studied the correlation between currency demand and tax pressure on US data. Later, this currency demand approach to measure the size of the shadow economy has been extended by various researchers in the field and applied on data from many countries. Recently, the currency demand approach, as well as other approaches, has been discussed at length in a survey, see Schneider and Enste (2000). The literature also abounds with theoretical studies ...