Sizing up the “Gray Zone”
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Publication date: 2006-02-28
GNPJE 2006;205(1-2):37-61
The article offers a critical review of methods for measuring the unregistered segment of the economy known as the “gray zone.” The first part of the article focuses on the definitions of the gray zone by economists and official institutions. Subsequently the author describes individual methods for measuring the off-the-books economy, showing their advantages and drawbacks. Additionally, methods used by the Central Statistical Office (GUS) for measuring the tax-evading segment of the economy are discussed. Also presented are gray zone statistics for individual member countries of the Organization for Economic Cooperation and Development (OECD) compared with estimates for Poland. The key conclusion of the review is that there is no universal definition of the gray zone and that it is necessary to use several methods for measuring the hidden economy in a specific country. On the other hand, data on the size of the unofficial economy shows that this segment of the economy displays constant growth.
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