Journal of Interdisciplinary Economics

This article examines the determinants of underreporting (reticence) on randomized response questions. A simple model is created to describe the interview process and draw some conclusion as to why people might misreport their true status despite given the assurance of institutional and statistical confidentiality. By looking at the relationship between firm-specific reticence and other firm-specific and industry-location-specific variables, it is found that (mis)trust (proxied by the proportion of contracts arranged before delivery) is a significant predictor of reticence. Underreporting does not seem to be significantly related to a misunderstanding of the procedure, education, profit levels or guilt. This seems to suggest that firms which are more cautious in their business dealings are also more cautious with the randomized response (RR) technique. In such cases, weighted estimates of the prevalence of sensitive traits might be derived without the use of the RR technique but through the use of variables relating to the nature of firm-level contracts. Moreover, more accurate data on sensitive topics can be extracted from large homogeneous populations.

JEL: C81, C83, D81

F. Hayek is known as an economist and a political philosopher who provided a specific social theory based on the idea of spontaneous order. This order state comes from a process that Hayek called ‘catallaxy’ and that results from a particular phenomenon of emergence. In this context, social systems such as money, market or language are presented as spontaneous orders, resulting from a particular evolutionary process of society. Although Hayek is well known to be an opponent of importation of physical concepts into economics, this article proposes a parallel between the Hayekian theory and a new field called ‘econophysics’. More precisely, I will show how the way of characterizing the phenomenon of emergence by econophysicists might, to some extent, be an analytical characterization of the Hayekian emergence. This claim will be explained and illustrated with the presentation of econophysical works describing money and language as a spontaneous order taking the form of a power law. The last section will discuss the debates about the methodological relevance to associate Hayek’s theory with an area of knowledge coming from physics and the potential\economic implications of such a rapprochement.

JEL: B25, B41, P11

This article analyzes the relationship between the shadow economy and tax evasion in order to verify if their dynamics are substantially identical or may present elements of differentiation, even though the two aforementioned phenomena appear (on the basis of certain statistical definitions) to overlap in terms of economic values. To this end, the article proceeds by providing a series of terminological definitions that are useful to properly classify these phenomena and then it lists the main methodologies used for their quantification. Although such methods and their strengths and weaknesses are well known in economic studies, it is useful to recall them in order to underline some questions connected with the development of a model aimed at describing the approach to the shadow economy and tax evasion from a microeconomic perspective. The first question is if the underground economy can exist in absence of tax evasion and, in that case, which are the factors that allow it. A related question is how is it possible from a microeconomic perspective to estimate in percentage the overall disadvantage (fiscal and non-fiscal) deriving from the total declaration of economic activities to public authorities compared to firms that work in the underground economy? On this matter, reference to case law and regulatory measures, performed in order to create an economic-juridical parallel on the shadow economy and tax evasion, has been made with regard to the Italian legal system, so as to fit the mathematical model as much as possible to observed facts.

JEL: K42, H26, O17

This article presents an agent-based simulation model of a stock exchange functioning with consideration of its main mechanisms. By contrast with other similar models, this model considers a clearing price calculation by a turnover maximization. Given various types of agents’ behaviour patterns, set exogenously, we have explored the dynamics and characteristics of assets, capital and wealth distributions in time. We reveal what mechanisms drive asset price up or down and infer that static agents’ characteristics, whatever they are, quickly lead to a flat market. It is shown that independently of agents’ strategy wealth distribution becomes more and more positively skewed as time tends to infinity, to what we give a mathematical reasoning. Moreover, different behaviour patterns affect the speed of inequality growth, which is illustrated by Gini coefficient dynamics. We also analyze the revealed effects and give for them a mathematical explanation.

JEL: C6, G1, I3, E3

In line with previous studies, this article seeks to extend the frontiers of impact of microcredit to employment creation. The article argues that accessing microcredit and employment of additional hand(s) are preceded by two interrelated decisions. In view of this, the study tests the hypothesis that the decision to access microcredit has a positive impact on the decision to create employment. In furtherance of the above, the study uses data collected from 500 women from northern Ghana in a household survey, of whom 250 are beneficiaries of microcredit. The bivariate probit selection estimation technique is employed and the results indicate that access to microcredit has 46 per cent probability of employment creation. Respondents from the Builsa district are more likely to access microcredit and also employ additional hand(s) than their counterparts from the Talensi and Bongo districts. Also, intra-household power play has a positive impact on access to microcredit and employment creation. It is, therefore, recommended that microfinance institutions desirous of employment creation need to increase access to microcredit in the rural areas both in breadth and depth, particularly credit for production activities. Also, a healthy intra-household power play needs to be encouraged by development practitioners to positively influence female-owned businesses.

JEL: D1, G21, J2

Phillip J. Bryson, Socialism: Origins, Expansion, Decline, and the Attempted Revival in the United States. Bloomington, IN: XLibris, pp. 834, $23.99, ISBN: 978-1-5144-1459-0 (paperback).