The concept of the survey of businesses and entrepreneurs operating informally

Abstract

Incentives to formalise the shadow economy should be based on knowledge of the causes and structure of informal activity. A specific problem in designing these incentives is the fact that information on the shadow economy is inherently unreliable and incomplete. A survey of the informal activities, the Survey on Conditions for Doing Business in Serbia, was therefore carried out for the purpose of this study on a representative sample of 1,251 businesses and entrepreneurs. This survey allows us to explore the shadow economy in Serbia from the business perspective for the first time, to assess the various forms that the shadow economy takes, and to analyse them according to the relevant characteristics of business entities, as all previous research has been based on household surveys. The survey also allows us to analyse the causes of and motives for informal activity, which is of particular importance in drafting recommendations for formalising the shadow economy. This chapter presents the aim and content of the survey and the survey methodology. It reviews various approaches to eliciting honest responses, provides the empirical definition of the shadow economy used in the survey, and details the sample allocation. The last part of the chapter focuses on the basic characteristics of the surveyed businesses.