MIMIC Model Research Articles

Modelling the Egyptian Shadow Economy: A MIMIC model and A Currency Demand approach

Abstract. We estimate the size and trend of the Egyptian shadow economy using two of the most commonly used methods: the currency demand approach and the structural equation MIMIC model. To the best of our knowledge, this is the first study to estimate an index of the size of the shadow economy in Egypt during the last four decades (1976 to 2013). We address the long term association between the variables, relax the assumption of multivariate normality and demonstrate different scenarios of constraining the reference variable in the MIMIC model. In addition to the standard explanatory variables used in the literature, we consider variables that are specifically related to the Egyptian economy such as self-employment, agricultural importance and a proxy for institutional quality of democratic institutions. Our results indicate a decreasing trend of the size of the shadow economy, yet it still has a huge weight on the official GDP for a developing country like Egypt leading to some negative externalities and thus hindering the development of the country. Keywords. Shadow economy of Egypt, MIMIC, CDA. JEL. C32, H26, I2, O17, P48.

DEVELOPMENT AND VALIDATION OF ‘SURE’: A PATIENT REPORTED OUTCOME MEASURE (PROM) FOR RECOVERY FROM DRUG AND ALCOHOL DEPENDENCE

BACKGROUNDPatient Reported Outcome Measures (PROMs) assess health status and health-related quality of life from the patient/service user perspective. Our study aimed to: i. develop a PROM for recovery from drug and alcohol dependence that has good face and content validity, acceptability and usability for people in recovery; ii. evaluate the psychometric properties and factorial structure of the new PROM (‘SURE’). METHODSItem development included Delphi groups, focus groups, and service user feedback on draft versions of the new measure. A 30-item beta version was completed by 575 service users (461 in person [IP] and 114 online [OL]). Analyses comprised rating scale evaluation, assessment of psychometric properties, factorial structure, and differential item functioning. RESULTSThe beta measure had good face and content validity. Nine items were removed due to low stability, low factor loading, low construct validity or high complexity. The remaining 21 items were re-scaled (Rasch model analyses). Exploratory and confirmatory factor analyses revealed 5 factors: substance use, material resources, outlook on life, self-care, and relationships. The MIMIC model indicated 95% metric invariance across the IP and OL samples, and 100% metric invariance for gender. Internal consistency and test-retest reliability were granted. The 5 factors correlated positively with the corresponding WHOQOL-BREF and ARC subscales and score differences between participant sub-groups confirmed discriminative validity. CONCLUSION‘SURE’ is a psychometrically valid, quick and easy-to-complete outcome measure, developed with unprecedented input from people in recovery. It can be used alongside, or instead of, existing outcome tools.

The Functionality of Spontaneous Mimicry and Its Influences on Affiliation: An Implicit Socialization Account.

There is a broad theoretical and empirical interest in spontaneous mimicry, or the automatic reproduction of a model’s behavior. Evidence shows that people mimic models they like, and that mimicry enhances liking for the mimic. Yet, there is no satisfactory account of this phenomenon, especially in terms of its functional significance. While affiliation is often cited as the driver of mimicry, we argue that mimicry is primarily driven by a learning process that helps to produce the appropriate bodily and emotional responses to relevant social situations. Because the learning process and the resulting knowledge is implicit, it cannot easily be rejected, criticized, revised, and employed by the learner in a deliberative or deceptive manner. We argue that these characteristics will lead individuals to preferentially mimic ingroup members, whose implicit information is worth incorporating. Conversely, mimicry of the wrong person is costly because individuals will internalize “bad habits,” including emotional reactions and mannerisms indicating wrong group membership. This pattern of mimicry, in turn, means that observed mimicry is an honest signal of group affiliation. We propose that the preferences of models for the mimic stems from this true signal value. Further, just like facial expressions, mimicry communicates a genuine disposition when it is truly spontaneous. Consequently, perceivers are attuned to relevant cues such as appropriate timing, fidelity, and selectivity. Our account, while assuming no previously unknown biological endowments, also explains greater mimicry of powerful people, and why affiliation can be signaled by mimicry of seemingly inconsequential behaviors.

Size and Development of Tax Evasion in 38 OECD Coutries: What do we (not) know?

Abstract. For the first time we develop a time series of tax evasion (in % of official GDP) for 38 OECD countries over the period 1999 to 2010 based on MIMIC model estimations of the shadow economy. Considering indirect taxation and self-employment as the driving forces of tax evasion, we observe a declining trend of tax evasion between 1999 and 2010 for all countries. The average size of tax evasion across all 38 countries over the period 1999 to 2010 is 3.2% of official GDP. The country with the highest average value is Mexico with 6.8%, followed by Turkey with 6.7%; at the lower end we find the United States and Luxembourg with 0.5% and 1.3%, respectively. Keywords. Tax evasion, OECD, MIMC model. JEL. K42, H26, D78, O17, O5, H11.

Generalized multiple indicators, multiple causes measurement error models

Generalized Multiple Indicators, Multiple Causes Measurement Error Models (G-MIMIC ME) can be used to study the effects of an unobservable latent variable on a set of outcomes when the causes of the latent variables are unobserved. The errors associated with the unobserved causal variables can be due to either bias recall or day-to-day variability. Another potential source of error, the Berkson error, is due to individual variations that arise from the assignment of group data to individual subjects. In this article, we accomplish the following: (a) extend the classical linear MIMIC models to allow both Berkson and classical measurement errors where the distributions of the outcome variables belong in the exponential family, (b) develop likelihood based estimation methods using the MC-EM algorithm and (c) estimate the variance of the classical measurement error associated with the approximation of the amount of radiation dose received by atomic bomb survivors at the time of their exposure. The G-MIMIC ME model is applied to study the effect of genetic damage, a latent construct based on exposure to radiation, and the effect of radiation dose on physical indicators of genetic damage.

Competing Factor Models of Child and Adolescent Psychopathology.

Co-occurring psychological disorders are highly prevalent among children and adolescents. To date, the most widely utilised factor model used to explain this co-occurrence is the two factor model of internalising and externalising (Achenbach 1966). Several competing models of general psychopathology have since been reported as alternatives, including a recent three factor model of Distress, Fear and Externalising Dimensions (Krueger 1999). Evidence for the three factor model suggests there are advantages to utilising a more complex model. Using the British Child and Adolescent Mental Health Survey 2004 data (B-CAMHS; N=7997), confirmatory factor analysis was used to test competing factor structure models of child and adolescent psychopathology. The B-CAMHS was an epidemiological survey of children between the ages of 5 and 16 in Great Britain. Child psychological disorders were assessed using the Strength and Difficulties Questionnaire (Goodman 1997), and the Development and Wellbeing Assessment (Goodman et al. 2000). A range of covariates and risk variables including trauma, parent mental health and family functioning where subsequently utilised within a MIMIC model framework to predict each dimension of the 2 and three factor structure models. Two models demonstrated acceptable fit. The first complimented Achenbach's Internalising and Externalising structure. The three factor model was found to have highly comparable fit indices to the two factor model. The second order models did not accurately represent the data nor did an alternative three factor model of Internalising, Externalising and ADHD. The two factor and three factor MIMIC models observed unique profiles of risk for each dimension. The findings suggest that child and adolescent psychopathology may also be accurately conceptualised in terms of distress, fear and externalising dimensions. The MIMIC models demonstrated that the Distress and Fear dimensions have their own unique etiological profile of risk. This study directly informs future measurement models of child and adolescent psychopathology and demonstrates the effectiveness of a three factor model.

Size and Development of the Shadow Economies of 157 Countries Worldwide: Updated and New Measures from 1999 to 2013

This paper is a first attempt to study the size and development of the shadow economies of 157 countries over 1999 to 2013. Using a MIMIC model, we find that higher tax and regulatory burden, unemployment and self-employment rates are drivers of the shadow economy, meaning that an increase of these causal variables increases the shadow economy. Our result also confirms previous findings of Friedrich Schneider, Andreas Buehn and Claudia Montenegro (2010). The estimated average of informality of 157 countries around the world, including developing, eastern European, central Asian and high income OECD countries averaged over 1999 to 2013 is 33.77% of official GDP. A critical discussion about the size of these macro-estimates comes to the conclusion that most likely the true shadow economy of these countries is only 69% of their estimated macro-MIMIC-values.

Size and Development of the Shadow Economies of 157 Worldwide Countries: Updated and New Measures from 1999 to 2013

This paper is a first attempt to study the size and development of the shadow economies of 157 countries between 1999 and 2013. Using a MIMIC model, we find that higher tax and regulatory burden, unemployment and self-employment rates are drivers of the shadow economy, meaning that an increase in these causal variables increases the shadow economy. Our result also confirms previous findings of Friedrich Schneider, Andreas Buehn and Claudia Montenegro. The estimated average of informality of 157 countries around the world, including developing, eastern European, central Asian and high income OECD countries averaged over 1999 to 2013 is 33.77% of official GDP. A critical discussion about the size of these macro-estimates comes to the conclusion that most likely the “true” shadow economy of these countries is only 69% of their estimated macro-MIMIC-values.

A Multiple Indicators Multiple Causes (Mimic) Model of Inattentive and Hyperactive Symptoms in a Representative Sample of British Children and Young People

Background: ADHD, when assessed using DSM IV criteria, is the most prevalent behavioral disorder (5%)in the United Kingdom (UK). Evidence is emerging that a percentage of children presenting with complex traumarelated symptoms may be misdiagnosed as having ADHD. However, the estimated prevalence is considerably lower(1.5%) when ICD-10 criteria are used to assess HKD. It is currently not known whether risk for misdiagnosis is an issue when the narrower ICD-10 criteria are used. This study aimed to systematically investigate these issues in order to investigate if: (1) significant associations between maltreatment exposures and ADHD symptom severity and HKD diagnosis were evident; (2) the percentage of trauma exposed HKD diagnosed cases whose parents reported an etiological link between trauma exposures and (a) symptom onset and (b) persistence of symptoms; (3) thepercentage of trauma exposed HKD cases who were being treated with Methylphenidate or Dexamphetamine. Methods: Data from the B-CAMHS epidemiological survey were analyzed (N=7997; male n=4111; femalen=3886). A Multiple Indicators Multiple Causes (MIMIC) approach was utilized. The effects of physical abuse (PA), sexual abuse (SA) and domestic violence (DV) on the structure of a four-factor model consisting of teacher and parent“hyperactivity” and “inattentiveness” were investigated. Binary logistic regression analyses were estimated to examine links between maltreatment and HKD diagnoses. Population attributable fractions (PAFs) were calculated to estimate the percentage of cases where exposures to maltreatment were directly implicated. Results: Significant associations between maltreatment exposures and the ADHD factors indicated that exposures significantly affected the manifestation of ADHD symptoms. Significant associations between HKD diagnoses and exposures to PA (OR=3.84, 95% CI=1.72-8.59) and DV (OR=3.46, 95% CI=1.98-6.05) were found. A total of 109 cases of HKD were diagnosed by the clinicians, of these a total of 26 cases (30%) were trauma exposed. Of these 26 cases, 45% of parents reported an etiological link between trauma exposure and current symptoms. Overall, 37.5% of physically abused and 15.8% of DV exposed HKD cases were taking stimulant based medication to treat their HKD symptoms. Conclusions: The increased likelihood of a diagnosis of ADHD/HKD among maltreated children may reflect the emotional and behavioral sequel of maltreatment. Children presenting with ADHD/HKD symptomatology should be screened for maltreatment exposures before diagnosis is concerned.

Nonlinear Tracking Control of a Pneumatically Actuated Lung Tumour Mimic Model

Abstract: This paper presents a model-based tracking control design for a mechanism dedicated to accurately reproduce the breathing-induced motion of a human lung tumour. A lung tumour mimic model should perform the same smooth motion as a real one in a human body during inhalation and exhalation. For this purpose, a 3-dimensional mechanism with three pneumatically driven axes has been developed and built up. The proposed control structure represents a cascaded flatness-based tracking control structure: In the fast inner loops, the chambers pressures of the pneumatic cylinders are controlled, whereas the outer loops are related to the position control of the cylinders. Furthermore, sliding mode observers are employed for each cylinder to estimate the corresponding states and a lumped disturbance force. The proposed overall control structure has been implemented and successfully validated on an innovative test rig.

Unofficial Economy Estimation by the MIMIC Model: the Case of Kenya, Namibia, Ghana and Nigeria

This study investigates the size and trend of the underground economies in selected African countries. Underground economies are present in all countries, but they are endemic in developing economies. Their presence is not necessarily bad for the economies, in which they prevail. It could however cause huge losses to government revenue and could also constitute serious violation of Labor regulations. The study uses the Multiple Indicators and Multiple Causes model (MIMIC), a variant of Simultaneous Equations Model (SEM). It involves two sets of variables: the observed variables and the indicator variables. The former include size of government, indirect tax rates, total tax rates, business regulation, interest rate on deposits, unemployment rate, quality of public services, and GDP per capita. The indicator variables were Labor participation rate in the official economy, the amount of cash held outside the banking system and growth in GDP per capita. This study found the average level of underground economies in Kenya, Namibia, Ghana and Nigeria as 33.7%, 29.1%, 36% and 47%, respectively. The estimated results show that the causes of shadow economic activities vary among the countries. The data was obtained from the World Bank country indicators and the International Financial Statistics.

A Fuzzy Model to Estimate the Size of the Underground Economy Applying Structural Equation Modeling

The underground economy is an ambiguous concept: the literature presents a wide variety of definitions about it; the activities it encompasses are mobile and dynamic; and its structure has displayed several variations as time goes by. The present work aims to estimate a fuzzy number (a possible interval) for the size of the underground economy by applying structural equation modelling with fuzzy data. The proposed fuzzy model applied here involves two main steps, changing the structural equation model to a reduced form, then making a nonlinear model from reduced-form equations applying fuzzy linear regression concepts and solutions. Finally, the time series of the underground economy are obtained using the GAMS mathematical optimization software and compared with the findings of two MIMIC models and a microeconomic method.

Using Mimic Models to Examine Determinants of Vat Gap in Lithuania

In recent years analysis of economic loss attributed to different aspects of shadow economy has attracted much attention of both academics and policy makers. Recent statistical data shows that new member states have on average a 9 percent higher VAT gap than the older members of the European Union. Knowing that economies of emerging markets rely on the VAT for a substantially higher percentage of their government revenues, it is very important to understand the determinants limiting revenue mobilization in those countries. In Lithuania, the VAT gap increased dramatically after the crisis of 2008 , and now is one of the largest in the EU. However, few studies have empirically tested some hypotheses about the VAT as a revenue-raising instrument in the country. The purpose of this study is to identify the determinants significantly influencing the size of the VAT gap in Lithuania using the MIMIC method for quarterly data of the period 2000-2013. The applied MIMIC model indicated that two factors (General government consumption expenditure and inflation) have a statistically significant impact on the VAT gap in the long-run. The results of the eMIMIC model show that two determinants (inflation and household deposits) have a statistically significant influence on the gap in the short-run. The authors believe that the key findings of the study can be used as one of the supporting tools in adjusting Lithuanian pro-growth tax policy and improving administration of VAT taxes.

Unofficial Economy Estimation by the MIMIC Model: the Case of Kenya, Namibia, Ghana and Nigeria

Unofficial Economy Estimation by the MIMIC Model: the Case of Kenya, Namibia, Ghana and Nigeria

Operational Risk Modelling in Insurance and Banking

The author of the presented paper is trying to develop and implement the model that can mimic the state of the art models of operational risk in insurance. It implements generalized Pareto distribution and Monte Carlo simulation and tries to mimic and construct operational risk models in insurance. At the same time, it compares lognormal, Weibull and loglogistic distribution and their application in insurance industry. It is known that operational risk models in insurance are characterized by extreme tails, therefore the following analysis should be conducted: the body of distribution should be analyzed separately from the tail of the distribution. Afterwards the convolution method can be used to put together the annual loss distribution by combining the body and tail of the distribution. Monte Carlo method of convolution is utilized. Loss frequency in operational risk in insurance and overall loss distribution based on copula function, in that manner using student-t copula and Monte Carlo method are analysed. The aforementioned approach represents another aspect of observing operational risk models in insurance. This paper introduces: 1) Tools needed for operational risk models; 2) Application of R code in operational risk modeling;3) Distributions used in operational risk models, specializing in insurance; 4) Construction of operational risk models.

Reflections on the Meaning and Measurement of Unobserved Economies: What Do We Really Know About the 'Shadow Economy'?

This paper reviews the meaning and measurement of unobserved economies germane to tax evasion and macroeconomic information systems. These include the unreported, non-observed, underground, illegal, informal and unrecorded economies. It reviews the progress and shortcomings of national and international agency efforts to measure these unobserved economies, noting what they have in common, what distinguishes one from another and their interconnections. It then examines the meaning of Professor Schneider’s Shadow Economy (SSE), and the veracity of his claim to have accurately estimated its size and trend worldwide by employing a MIMIC model methodology. It concludes that SSE estimates suffer from conceptual flaws, apparent manipulation of results and insufficient documentation for replication, questioning their place in the academic, policy and popular literature.

CFD–DEM simulation of the filtration performance for fibrous media based on the mimic structure

In order to obtain the comprehensive filtration information, such as the deposition morphology of particles, evolutions of the instantaneous pressure drop and efficiency, 3-D mimic models of fibrous media had been established using a stochastic algorithm and computational fluid dynamics (CFD) - discrete element method (DEM) model was adopted to simulate the gas-solid flow characteristics in fibrous media exposed to particle loading in this work. Meanwhile, the simulation results had been validated by the macro-empirical model proposed in the previous literature. In addition, the influence of various parameters including porosity, face velocity and particle size on the filtration performance of fibrous media had also been investigated. It is concluded that simulation results of the CFD–DEM model are good agreement with predictive values of the macro-empirical model. Moreover, the porosity of fibrous media, face velocity and particle size have an important effect on the filtration performance of the fibrous media.

Career adaptability in Lithuania: A test of psychometric properties and a theoretical model

The Career Adapt-Abilities Scale-Lithuanian Form consists of four six-item subscales measuring concern, control, curiosity, and confidence. These are thought to be the main dimensions of career adaptability reflecting individual psychosocial resources to cope with occupational transitions, developmental tasks, and work traumas. Two studies were administered in a sample (N = 767) of Lithuanian high school students. The results showed factor structure to be identical to that of the CAAS-International Form. Moreover, good to excellent scale internal consistency coefficients were obtained. With a slight exception, MIMIC model analysis revealed no major effects of demographic variables upon the CAAS factor or factor indicator scores. Concurrent validity analysis showed career adaptability, as measured by the CAAS-Lithuanian Form, to be significantly related to career aspirations, to the frequency of career exploration behaviors and to career decidedness. Finally, as hypothesized by the career construction model of adaptation, career exploration behaviors mediated the link between career adaptability and decidedness.

A Fundamental Contribution to the Analysis of Shadow Economy

Schneider has been one of most important authors as regard the analysis of shadow economy. In this article we examine his last two theoretical and econometric contributes. They are sufficient to understand the development of his thinking about the causes and measurement of shadow economy. It is very important his structural equation which is elaborated with the help of microeconomic choices of the operators in the shadow economy. This equation permits to give a clear definition of shadow economy and to elaborate a taxonomic analysis of various activities in shadow economy. To macroeconomic level, Schneider uses the indirect method Multiple-Indicators-Multiple-Causes (MIMIC model), integrated with the measurement of demand for cash regarding the shadow economy. Also the econometric calculus of this phenomenon is very interesting, because two series of statistics are presented. The former regarding the years 1999-2010 and the latter the period 2003-2014. At the end we point and interesting suggestion about the uniformity of the countries considered. It regards the actual situation of some countries as Italy, where the national statistics are not significant because in them there are great differences between their regions. In that case is useful the direct method with interview and questionnaires, that Schneider considered not realizable. With this method and in this condition is possible that the State intervention not is homogenous throughout the country and may present a correct regional articulation, achieving greater effectiveness to contrast shadow economy.

Abuse and neglect in adolescents of Jammu, India: The role of gender, family structure, and parental education

The present study aimed to assess the factor structure of the childhood trauma questionnaire (CTQ; Bernstein & Fink, 1998), and use it to describe the prevalence of abuse and neglect in Indian adolescents, and its associations with gender, family structure (nuclear vs. joint), and level of parental education. Participants were 702 adolescents from Jammu in the age range of 13–17 years (41.5% female). We found acceptance for a four-factor intercorrelated model for the CTQ with emotional abuse, physical abuse, sexual abuse, and neglect (5 emotional neglect and 2 physical neglect items) factors following a confirmatory factor analysis (CFA). Forty-one to sixty-one percent of adolescents reported maltreatment which is higher in comparison with CTQ based studies from the West. Analysis of CFA with covariates (MIMIC model) indicated that males, and adolescents of less educated mothers’ and from joint families reported higher abuse and neglect, and sexual abuse, respectively, while fathers’ education level was not associated with abuse or neglect. Implications of these findings are highlighted.