Measuring the economic impact of metrological frauds in trade metrology using an input-output model

Abstract

The present study aims to evaluate the economic distortion in trade metrology due to metrological frauds in measuring instruments used in the commerce and industry. The economic distortion represents the economic losses due to measurement deviations in trade. An Input-Output Model approach is carried out in order to determine the economic distortion whenever an output in a process represents the input to another one and it considers the aggregation of values of products traded in the economy. A case test is also conducted using empirical data of measurement errors and metrological frauds in the fuel sector in Brazil in order to determine their economic impact. The results show that the impact of metrological frauds increase the distortion uncertainty from US$ 54,910,307.13 to US$ 303,734,309.35 toward consumers’ losses creating a great asymmetry in the market.