MIMIC Models, Cointegration and Error Correction: An Application to the French Shadow Economy

The analysis of economic loss attributed to the shadow economy has attracted much attention in recent years by both academics and policy makers. Often, multiple indicators multiple causes (MIMIC) models are applied to time series data estimating the size and development of the shadow economy for a particular country. This type of model derives information about the relationship between cause and indicator variables and a latent variable, here the shadow economy, from covariance structures. As most macroeconomic variables do not satisfy stationarity, long run information is lost when employing first differences. Arguably, this shortcoming is rooted in the lack of an appropriate MIMIC model which considers cointegration among variables. This paper develops a MIMIC model which estimates the cointegration equilibrium relationship and the error correction short run dynamics, thereby retaining information for the long run. Using France as our example, we demonstrate that this approach allows researchers to obtain more accurate estimates about the size and development of the shadow economy.shadow economy, tax burden, regulation, unemployment, cointegration, error correction models, MIMIC models

Decentralization and the Shadow Economy: Oates Meets Allingham-Sandmo

This paper studies the impact of decentralization on the shadow economy. We argue that decentralization may decrease the size of the shadow economy mainly through two transmission channels: (1) Decentralization enhancing public sector efficiency (efficiency effect), and (2) decentralization reducing the distance between bureaucrats and economic agents, which increases the probability of detection of shadow economic activities (deterrence effect). Using various measures of fiscal, political and government employment decentralization in a cross-section of countries, we find the deterrence effect to be of more importance. The deterrence effect is stronger, the lower the degree of institutional quality. Remarkably, we find no robust evidence of the efficiency effect.decentralization, shadow economy

Size and Development of the Shadow Economy and of Do-it-yourself Activities in Germany

This paper presents the first MIMIC (multiple indicator multiple causes) model estimate of the size and development of the shadow economy and of do-it-yourself (DIY) activities in Germany from 1970 to 2005. By 2005, they reached a level of about 17% and 4.94%. While the shadow economy has regularly increased over the years, DIY activities – though quite sizeable – have remained more or less constant since the early 1990s. The driving forces for the shadow economy are regulation and tax burden whereas for DIY activities, the level of unemployment is the main factor.shadow economy, do-it-yourself activities, tax burden, regulation, domestic currency in circulation, unemployment, MIMIC models

Informal Economic Activities

The dissertation “Informal Economic Activities” takes a comprehensive approach to the informal economy by studying traditional shadow economic activities, household DIY activities, and the smuggling of illegal and legal goods. Chapter 2 analyzes shadow economic and DIY activities and presents a dual estimation for the development of both types of informal economic activities in Germany from 1970 to 2005. It also considers the impact of German reunification on shadow economic and DIY activities and employs a proper estimate of domestic currency in circulation within Germany as an indicator variable for the shadow economy. Chapter 3 studies an informal economic activity that has attracted much attention recently: legal goods smuggling, or the illegal trade of otherwise legal goods. The main channel of this type of smuggling is the falsification of trade documents. By reporting false amounts of exports and/or imports to authorities smugglers, or trade misinvoicers, seek to avoid paying taxes and/or tariffs. Chapter 4 widens the analysis of smuggling to the smuggling of illegal goods and studies the smuggling of legal and illegal goods across the U.S.-Mexico border in order to improve the understanding of illegal trade. Studying the U.S.-Mexican case is particularly interesting as most illegal drugs and immigrants enter the United States via the Mexican border. The empirical analyses in the dissertation “Informal Economic Activities” are based on structural equation models (SEMs). The results demonstrate that the informal economy is significant and that growth of the informal economy is not exclusive to developing countries, although it is a more serious problem in these countries. Moreover, although the informal economy covers a wide range of rather diverse economic activities, the dissertation works out that a few similarities exist. These are important, especially for policymakers, in first understanding what drives informal economic activities and second designing appropriate policies to deter them

Krise der Wirtschaftswissenschaften: Braucht die VWL eine Neuausrichtung?

In den vergangenen Jahren hat sich das Verständnis der Volkswirtschaftslehre gewandelt. Bis in die siebziger Jahre dominierte die Wirtschaftspolitik, die sich auch als Berater außerhalb der Universitäten verstand. Dann schwappte von den USA die Mathematisierung der Volkswirtschaftslehre nach Deutschland über und ergriff ganze Universitäten. Das Fach Wirtschaftspolitik wurde ins Abseits gedrängt. Welchen Beitrag leistet die moderne Volkswirtschaftslehre zum Verständnis aktueller wirtschaftspolitischer Probleme? Lutz Arnold, Universität Regensburg, stellt fest, dass die VWL zwar ebenso wenig gegen Fehlentwicklungen gefeit sei wie andere wissenschaftliche Disziplinen. Aus den Tatsachen, dass nur ein kleiner Teil der aktuellen Forschung in den wirtschaftspolitisch relevanten Lehrbüchern zu finden sei und dass die Ökonomen die aktuelle Wirtschafts- und Finanzkrise nicht prognostizierten, lasse sich aber nicht auf eine Krise der VWL schließen. Olaf Hübler, Universität Hannover, weist den Vorwurf, die Ökonomik könne keinen relevanten Beitrag zur Vorhersage, Erklärung und Beseitigung der Krise liefern, da die ökonomische Theorie zu stark mathematisiert sei und menschliches Verhalten nur mangelhaft berücksichtige, zurück. Man solle weiter auf dem eingeschlagenen Weg vorangehen. Für Peter Oberender, Universität Bayreuth, ist es wichtig, die Internationalität der deutschen Volkswirtschaftslehre zu stärken. Gleichwohl könne eine Fundierung ordnungsökonomischer Analyse in den Kontext der ideengeschichtlichen Entwicklung hilfreiche Orientierungspunkte für die Auseinandersetzung mit den Grenzbereichen der ökonomischen Analyse geben. Und Alexander Karmann und Andreas Bühn, Technische Universität Dresden, fordern, dass die begonnene Öffnung der volkswirtschaftlichen Forschung in Deutschland konsequent fortgeführt werden solle.Wirtschaftsstudium, Volkswirtschaft, Wirtschaftswissenschaftliche Hochschule, Krise, Deutschland

Informal Economic Activities

The dissertation “Informal Economic Activities” takes a comprehensive approach to the informal economy by studying traditional shadow economic activities, household DIY activities, and the smuggling of illegal and legal goods. Chapter 2 analyzes shadow economic and DIY activities and presents a dual estimation for the development of both types of informal economic activities in Germany from 1970 to 2005. It also considers the impact of German reunification on shadow economic and DIY activities and employs a proper estimate of domestic currency in circulation within Germany as an indicator variable for the shadow economy. Chapter 3 studies an informal economic activity that has attracted much attention recently: legal goods smuggling, or the illegal trade of otherwise legal goods. The main channel of this type of smuggling is the falsification of trade documents. By reporting false amounts of exports and/or imports to authorities smugglers, or trade misinvoicers, seek to avoid paying taxes and/or tariffs. Chapter 4 widens the analysis of smuggling to the smuggling of illegal goods and studies the smuggling of legal and illegal goods across the U.S.-Mexico border in order to improve the understanding of illegal trade. Studying the U.S.-Mexican case is particularly interesting as most illegal drugs and immigrants enter the United States via the Mexican border. The empirical analyses in the dissertation “Informal Economic Activities” are based on structural equation models (SEMs). The results demonstrate that the informal economy is significant and that growth of the informal economy is not exclusive to developing countries, although it is a more serious problem in these countries. Moreover, although the informal economy covers a wide range of rather diverse economic activities, the dissertation works out that a few similarities exist. These are important, especially for policymakers, in first understanding what drives informal economic activities and second designing appropriate policies to deter them

Informal Economic Activities

The dissertation “Informal Economic Activities” takes a comprehensive approach to the informal economy by studying traditional shadow economic activities, household DIY activities, and the smuggling of illegal and legal goods. Chapter 2 analyzes shadow economic and DIY activities and presents a dual estimation for the development of both types of informal economic activities in Germany from 1970 to 2005. It also considers the impact of German reunification on shadow economic and DIY activities and employs a proper estimate of domestic currency in circulation within Germany as an indicator variable for the shadow economy. Chapter 3 studies an informal economic activity that has attracted much attention recently: legal goods smuggling, or the illegal trade of otherwise legal goods. The main channel of this type of smuggling is the falsification of trade documents. By reporting false amounts of exports and/or imports to authorities smugglers, or trade misinvoicers, seek to avoid paying taxes and/or tariffs. Chapter 4 widens the analysis of smuggling to the smuggling of illegal goods and studies the smuggling of legal and illegal goods across the U.S.-Mexico border in order to improve the understanding of illegal trade. Studying the U.S.-Mexican case is particularly interesting as most illegal drugs and immigrants enter the United States via the Mexican border. The empirical analyses in the dissertation “Informal Economic Activities” are based on structural equation models (SEMs). The results demonstrate that the informal economy is significant and that growth of the informal economy is not exclusive to developing countries, although it is a more serious problem in these countries. Moreover, although the informal economy covers a wide range of rather diverse economic activities, the dissertation works out that a few similarities exist. These are important, especially for policymakers, in first understanding what drives informal economic activities and second designing appropriate policies to deter them

Preference between medical outcomes and travel times: an analysis of liver transplantation

Background: There is evidence of a volume outcome relationship for liver transplantation. In Germany, there is a minimum volume threshold of 20 transplantations per year for each center. Thresholds potentially lead to centralization of the healthcare supply, generating longer travel times. Objective: This study assessed whether patients are willing to travel longer times to transplantation centers for better outcomes (lower hospital mortality and higher 3-year survival) and identified patient characteristics influencing their choices. Methods: Participants were recruited in hospitals and via random samples at registration offices. Discrete choice experiments were used to identify trade-offs in their choices between local and regional centers. Descriptive statistics and logistic regression models were used to measure patients’ preferences and quantify potentially influencing characteristics. Results: Overall, 82.22% (in-hospital mortality) and 84.44% (3-year survival) of the participants opted to accept a longer travel time in order to receive a liver transplantation with better outcomes. Conclusion: Most participants were willing to trade shorter travel times for lower mortality risks and higher 3-year survival in cases of liver transplantation

Development, piloting, and evaluation of an evidence-based informed consent form for total knee arthroplasty (EvAb-Pilot): a protocol for a mixed methods study

Background!#!Practitioners frequently use informed consent forms to support the physician-patient communication and the informed consent process. Informed consent for surgery often focuses on risk centered information due to high liability risks for treatment errors. This may affect patients' anxiety of adverse events and the nocebo effect. This study focuses on the optimization of pre-surgical information on risks and complications, and at the same time reconciles these information with legal requirements.!##!Methods!#!The development, piloting, and evaluation of evidence-based informed consent forms for total knee arthroplasty (TKA) and related anesthesia procedures will follow the UK MRC Framework for developing and evaluating complex interventions. Conducting different sub-studies, we will (I) qualitatively explore the information acquisition and decision-making processes, (II) develop and pilot test evidence-based informed consent forms on the example of TKA and related anesthesia procedures, (III) conduct a monocentric interrupted time series (ITS) pilot study to evaluate the effects of evidence-based informed consent forms in comparison with standard consent forms, and (IV) perform a process evaluation to identify barriers and facilitators to the implementation of the intervention and to analyze mechanisms of impact.!##!Discussion!#!The evidence-based and understandable presentation of risks in informed consent forms aims at avoiding distorted risk depiction and strengthening the patients' competencies to correctly assess the risks of undergoing surgery. This might reduce negative expectations and anxiety of adverse events, which in turn might reduce the nocebo effect. At the same time, the practitioners' acceptance of evidence-based informed consent forms meeting legal requirements could be increased.!##!Trial registration!#!ClinicalTrials.gov, NCT04669483 . Registered 15 December 2020. German Clinical Trials Registry, DRKS00022571 . Registered 15 December 2020

Pooled RT-qPCR testing for SARS-CoV-2 surveillance in schools - a cluster randomised trial

Background: The extent to which children and adolescents contribute to SARS-CoV-2 transmission remains not fully understood. Novel high-capacity testing methods may provide real-time epidemiological data in educational settings helping to establish a rational approach to prevent and minimize SARS-CoV-2 transmission. We investigated whether pooling of samples for SARS-CoV-2 detection by RT-qPCR is a sensitive and feasible high-capacity diagnostic strategy for surveillance of SARS-CoV-2 infections in schools. Methods: In this study, students and school staff of 14 educational facilities in Germany were tested sequentially between November 9 and December 23, 2020, two or three times per week for at least three consecutive weeks. Participants were randomized for evaluation of two different age adjusted swab sampling methods (oropharyngeal swabs or buccal swabs compared to saliva swabs using a ‘lolli method’). Swabs were collected and pooled for SARS-CoV-2 RT-qPCR. Individuals of positive pooled tests were retested by RT-qPCR the same or the following day. Positive individuals were quarantined while the SARS-CoV-2 negative individuals remained in class with continued pooled RT-qPCR surveillance. The study is registered with the German Clinical Trials register (registration number: DRKS00023911). Findings: 5,537 individuals were eligible and 3970 participants were enroled and included in the analysis. In students, a total of 21,978 swabs were taken and combined in 2218 pooled RT-qPCR tests. We detected 41 positive pooled tests (1·8%) leading to 36 SARS-CoV-2 cases among students which could be identified by individual re-testing. The cumulative 3-week incidence for primary schools was 564/100,000 (6/1064, additionally 1 infection detected in week 4) and 1249/100,000 (29/2322) for secondary schools. In secondary schools, there was no difference in the number of SARS-CoV-2 positive students identified from pooled oropharyngeal swabs compared to those identified from pooled saliva samples (lolli method) (14 vs. 15 cases; 1·3% vs. 1·3%; OR 1.1; 95%-CI 0·5–2·5). A single secondary school accounted for 17 of 36 cases (47%) indicating a high burden of asymptomatic prevalent SARS-CoV-2 cases in the respective school and community. Interpretation: In educational settings, SARS-CoV-2 screening by RT-qPCR-based pooled testing with easily obtainable saliva samples is a feasible method to detect incident cases and observe transmission dynamics. Funding: Federal Ministry of education and research (BMBF; Project B-FAST in “NaFoUniMedCovid19”; registration number: 01KX2021)