This paper duscusses tha author's wok on measuring and modelling the New Zealand underground economy, 1968-1994. Particular attention is paid to the relationship between this activity and taxation policy. An optimal level for the effective tax rate is reported, in terms of maximizing the impact...

This study investigates the degree of size-distortion of the RESET, FRESETL and FRESETS tests, and their ability to reject falsely specified models in terms of an omitted variable, in the presence of autocorrelation. Specifically, in the presence of AR(1) and MA(1) processes, respectively. We...

In this paper I support using econometric techniques to measure the size of the hidden (underground) economy, because such information is important for the construction of certain economic models, and for empirical policy analysis. Generally, detailed information on the output of the hidden...

In this paper we outline the results of some extensive econometric modelling that has been undertaken to establish a time-series of the size of the New Zealand Hidden Economy from 1968 to 1994. The derivation of these data has facilitated a good deal of associated research, and here we draw on...

This paper develops and estimates a structural, latent variable, model for the hidden economy in New Zealand, and a separate currency-demand model. The estimated latent variable model is used to generate an historical time-series index of hidden economic activity, which is calibrated via the...

This paper develops a structural, latent variable, model for the hidden economy in New Zealand, and a separate currency-demand model. The latent variable model is used to generate an historical time-series index of hidden economic activity, which is calibrated via the information from the...

This paper considers unit root testing of time-series data with missing observations. Three procedures for dealing with the gaps are discussed. These include: ignoring the gaps, replacing the gaps with the last available observation, and filling the gaps with a linear interpolation method. The...

This paper analyzes a large sample of unit records relating to tax audit cases for individual New Zealand firms, undertaken by Inland Revenue New Zealand over the period 1993 to 1995. The data are used to reveal the key characteristics that are associated with firms that comply, or fail to...

In this paper we consider a simple Logistic relationship between the relative size of the Hidden Economy in New Zealand, and the effective tax rates for the major tax components. The model that we estimate from annual time-series data is used to simulate the effects of changes in both the...

This paper considers the "learning curve" relationship between the aggregate tax rate and the relative size of the hidden economy in New Zealand. Some simple non-linear models are estimated so that the effects of changes in the effective tax rate on the underground economy can be simulated. We...