Statistical Illusions, Mistaken Policies

Abstract

The subterranean economy, by its very nature, tends to be hidden from official view. Economists, who are under the comforting illusion that the statistics they peruse are an accurate reflection of reality, have taken practically no notice of it. But it is ubiquitous. The reader is advised to conduct a small experiment, to ask his circle of acquaintances for examples of income received without intercession of the tax collector. He is likely to find that his friends can cite plenty of cases. When first published my estimate of U.S. subterranean income, those few who cared to comment thought, for the most part, that my estimate was too high. But, in this field, the more you look, the more you find. am reasonably certain that when my estimate is judged by history some years hence, it will be found to have been low rather than high. Professor Feige, in his article, also commented, I wish to note that began this investigation suspecting that the irregular economy was smaller than previous estimates had suggested. am now convinced that the irregular economy is indeed of staggering proportions and growing rapidly.