consumer participation in the informal economy

Consumer Participation in the Informal Economy

Kevin R McCrohan George Mason University

James D. Smith University of Michigan

This study investigates consumer use of informal suppliers in order to determine if there is a segment that is prone to deal with this type of vendor. Based on a national probability sample of households the authors found that such a segment exists and that the demographic profile of this segment is congruent with prior research on income tax evasion. The authors conclude that there appears to be a probable relationship between a propensity to evade income taxes and the heavy use of informal suppliers.

INTRODUCTION

McCrohan and Smith (1986) presented estimates of the magnitude of consumer use of informal suppliers. The focus of their article was the relationship between aggregate informal market expenditures and formal market expenditures. They concluded that the dollar volume of informal economic activity was small in comparison to total personal consumption expenditures. However, they noted that these transactions involved tacit collusion between the consumer and the supplier and that this questionable behavior deserved further attention.

Rationale

That a phenomenon such as an informal economy exists appears to be a certainty. Unfortunately, detailed information concerning this activity is limited. Its size and components are subject to differing estimates in different years; for example, unreported taxable income was estimated at $233 billion in 1983 (ICF 1986) and $255

�9 1987, Academy of Marketing Science Journal of the Academy of Marketing Science Winter, 1987, Vol. 15, No. 4, 062-068 0092-0703 / 87 / 1504-0062

billion in 1978 (Frey and Pommereheme 1984). In addition, the estimates are based on trends or conjecture that are not related to a dollar amount; for example, Roper Reports (May 1985) indicates continued growth in the underground economy. They note that approximately 70% of respondents had heard about some form of barter e.g., a carpenter and a mechanic trading services (up from 62% in April 1982) and 18% had personally traded services with someone instead of paying for them within the past six months (up from 17% in April 1982). Especially active (Roper Reports May 1985) were the young and political/ social activists.

At the consumer level, there is almost nothing known about the underground economy although there have been a few studies that examined informal retailing institutions. Greenberg, Sherman, Topoi, and Cooperman (1980) studied the extent of street vending in New York City and estimated that purchases from these vendors were approximately $113 million in 1979. Trinkus (1980) investigated the price awareness of buyers at flea markets. He found comparatively low price awareness on the part of consumers. Razzouk and Gourley (1982) found that most flea market shoppers had previously purchased products at the same flea market and that they had experienced very little dissatisfaction with the products purchased. Consumer motives for shopping at flea markets were found to involve the search for bargains, the fun of being around people, the pleasure of browsing, and the assortment of merchandise available.

Sherman, McCrohan, and Smith (1985) interviewed shoppers at flea markets in the New York City area and found that purchases were positively related to the view that flea markets were friendly places with personal service where they could have fun shopping for bargains. Expenditures were negatively associated with product quality and service related concerns. More importantly, for purposes of the present study, expenditures were negatively associated with the concern that the products may have been stolen or that the vendor may not have been

JAMS 62 WINTER, 1987

CONSUMER PARTICIPATION IN THE INFORMAL ECONOMY MC CROHAN & SMITH

paying the required taxes. This suggests that there may be consumer segments that are prone to, or avoid, suppliers who operate on the fringes in order to evade taxation.

The overall objective of this study is to determine if an identifiable group of consumers exists who are heavy users of the goods and services provided by informal suppliers. 1 McCrohan and Smith (1986) had estimated that consumers purchased approximately $42 billion dollars from informal suppliers during 1981, with over eighty percent of U.S. households purchasing some goods or services in the informal economy. Our estimate, and this study, is based on data collected by the Survey Research Center at the University of Michigan as part of their ongoing Surveys of Consumer Attitudes.

Although there is a dearth of information concerning consumer use of informal markets there is a limited body of literature which examines the factors effecting noncompliance with U.S. tax laws. The assumption being made here is that, given the lack of market specific information in this area, a reasonable starting place for developing hypotheses concerning consumer use of informal suppliers would be the literature on noncompliance with U.S. tax laws.

Demographic Correlates of Noncompliance

Studies of demographic correlates of noncompliance with federal income taxes fall within the general literature on social deviance. While the truthfulness of the respondents in such situations is cause for concern, numerous studies have found sizable percentages of respondents that were willing to admit to crimes of varying severity (Appleton and Grasmick 1977, Tittle 1980).

Mason, Calvin, and Faulkenberry (1975) interviewed Oregon taxpayers concerning their admitted noncompliance with federal income tax regulations. They found that noncompliance was associated with being under 35 and male. Mason and Lowry (1981) replicated the earlier Oregon study and found that women were engaging in tax evasion as frequently as men. They also found that those who underreport income tend to be better educated, fully or part-time employed, or self-employed.

Westat study, "Self-Reported"(1980) found that age was negatively associated with noncompliance while education and income were positively associated with noncompliance. The most recent study of noncompliance (Skelly 1984) found that noncompliers were in their peak earning years (25-54), made $25,000 per year or more, and were better educated than those who had not admitted to cheating on their income tax. Aitken and Bonneville (1980) found that younger, college educated taxpayers were more likely to admit income tax evasion.

In addition to these studies a limited number of other surveys have examined factors related to noncompliance without requesting that the respondent admit such behavior. Roper Reports (1985) found a positive relationship between the belief that taxpayers overstate deductions and income ($25,000 plus) and age (30-44). Additionally they found a slight positive relationship between being single or divorced and the belief that

taxpayers fail to file returns, or shade income or overstate deductions when they do. It is possible that the belief of these groups are affected by their experiences in completing their own income tax returns. Finally, Tittle (1980), Grasmick and Scott (1982), and Thurman, St. John, and Riggs (1984) found that tax evaders are less likely than compilers to think that tax evasion is wrong. This would point to their not being offended by a vendor's suggestion that payment in cash will result in a lower price.

The profile of the noncomplier that emerges from this review is that of a single or divorced, younger, college educated, upper-income individual who is presently employed. Table 1 presents the hypothesized relationship between demographic characteristics and the magnitude of purchases from informal suppliers. The underlying assumption being made is that individuals who admit to cheating on their taxes are more predisposed to deal with informal suppliers and would spend more with these vendors.

This appears likely because a number of studies have identified the existence of networks of noncompliers (i.e., noncompliers who discuss their noncompliance with others of a similiar nature). Kinsey (1984) provides an excellent review of these studies noting that these observed effects may be the result of a lack of informal sanctions against noncompliance among certain groups. Further, Skelly (1984) identified a group of taxpayers, called "strategic noncompliers," who were aware of and condoned all types of tax cheating. Finally, Sherman, McCrohan, and Smith (1985) found that concern with vendor tax evasion negatively effected expenditures at flea markets.

While there is some support for the hypotheses relating to age, education, income, and employment, and to a lesser extent marital status, the balance of the hypotheses are somewhat more tenuous. However, since income and employment are positively associated with noncompliance it seems likely that the number of hours worked would be positively associated with expenditures as would the employment status of the spouse and the number of hours the spouse worked. The relationship between employment, income, and education would point towards whites participating in the informal economy to a greater extent than nonwhites.

Finally, the negative relationship between the number of children and purchases from informal suppliers is based on the relationship between being single and the belief in noncompliant behavior on the part of other taxpayers.

METHODOLOGY

The results of the Survey Research Center (SRC) study are based on a national probability sample of 2,753 households which were interviewed by phone. The response rate was 75.7 percent. There was some item non- response on the demographic questions resulting in a 70 percent response rate for this study. Questions about purchases in the informal economy were included within a set of questions broadly economic in nature which were asked in the monthly Surveys of Consumer Attitudes conducted by the SRC.



TABLE 1 Hypothesized Relationships between Demographic Variables and Purchases from Informal Suppliers

Variable Income Employment Status Hours Worked Per Week Education Age Race Marital Status Employed Spouse Spouses Hours Worked per Week Number of Children 18

Purchases From Informal Suppliers High>Low Presently Employed>Not Presently Employed 40 or More>39 or Less College Graduate or Higher>Some College or Lower Younger3~Older White>Non-White Non-Married>Married Presently Employed>Not Presently Employed 40 or More~39 or Less L o w , High

NOTE: These variables are routinely collected as part of the University of Michigan's Surveys of Consumer Attitudes.

The questionnaire used for the informal economy study was developed after focused discussion group sessions with members of families who lived in both urban and suburban areas and whose incomes were representative of a cross- section of American households. The questionnaire proceeded through three pretests before a final instrument emerged.

Three waves of final interviews, each consisting of a sample of about 700 households, were conducted between September and November of 1981. Respondents were asked to report amounts spent on a variety of goods and services during the past 12 months. The three waves were pooled and treated as though they were a single interview taken at one point in time. The information collected represents the annual purchases of consumers during the period from November 1980 through October 1981.

The questions on informal transactions were asked in the context of many questions about related economic activities. The focused discussion groups and the pretests had indicated that the term "on the side" was a well- established part of the national vocabulary. Therefore, the interviewer, before asking respondents the questions related to the informal economy, stated the following in a straightforward manner:

"We would like to ask you some questions about the opportunities people have to buy goods and services from persons who sell them on the side."

For each of the areas of consumption, the focus on the term "on the side" was reinforced by examples, or by restating the request for information about purchases made from vendors doing business on the side. A number of items of information about the vendor's occupation, the place where services were done or goods sold, how respondents learned about the vendor, and whether payment was requested in cash were solicited to help filter out the estimates of any formal economic activities that might have crept into respondent's answers. A more detailed discussion of the methodology may be found in Smith (1982).

The study found that over 80 percent of the respondents had purchased some goods or services in the informal economy during 1981. These 1,925 respondents were divided into quartiles to aid in the interpretation of the dummy variable multiple discriminant function analysis. The respondents were divided into an analysis sample and a validation sample. The Press Q statistic (Press 1972) was used to determine if the procedure discriminated better than chance. Finally, the test for equality of group dispersion matrices indicated no significant differences.

RESULTS AND DISCUSSION

Although the predictor variables used in the study were selected for their fit with existing Surveys of Consumer Attitudes procedures more than their strong theoretical bases all were significantly related to purchases from informal suppliers and eight were in the hypothesized direction. Being married and having children under 18 were found to be positively related to purchases rather than negatively associated as hypothesized. The Chi-square analysis is presented in Table 2.

Respondents earning more than $40,000 per year comprised 24 percent of the heavy user group although they accounted for only 12 percent of the respondents. Employed respondents purchased proportionately more from informal suppliers than unemployed or retired respondents, providing some support to the hypothesis that informal markets are not second class markets. There was a slight positive relationship between the number of hours worked and expenditures. Fifty-four percent of the heavy informal supplier users worked more than 40 hours per week although they accounted for only 47 percent of the respondents. Purchases from informal suppliers were also found to be positively related to education with the 25 percent of respondents that were college graduates or possessed some graduate training comprising 35 percent of the heavy user category. Respondents between 26 and 55 years old comprised the bulk of the heavy user category (70



TABLE 2 Chi-square Analysis of the Effect of Predictor Variables on Consumer Purchase Levels from

Informal Suppliers*

Variable X2Value Degrees Level of of

Freedom Significance Income" 204.30 12 .01 Employment b 64.21 9 .00 l Hours Worked Per Week c 58.12 6 .001 Education d 119.65 9 .001 Age ~ 82.25 12 .00 I Race f 8.02 3 .045 Marital Status g 24.99 3 .001 Spouse Employment h 41.09 9 .001 Spouse Hours Worked Per Week ~ 62.57 6 .001 Number of Children< 18 j 68.50 9 .001

a The income categories were 0-$9,999, $10,000-$19,999, $20,000- $29,999, $30,000-$39,999, and $40,000 or more.

bThe employment categories were presently working, unemployed, retired or housewife.

CThe hours worked categories were 0, 1-39, and 40 or more. dThe education categories were l-12 years, high school diploma, 13-16 years, and college graduate or higher.

~The age categories were less than 25, 26-35, 36-45, 46-55, and 55 plus. fThe categories were white and non-white. gThe categories were married, or single or divorced. hThe categories were presently working, unemployed, retired, or housewife. 'The categories were 0, 1-39, and 40 or more. JThe categories were 0, 1 or 2, 3 or 4, 5 or more.

*The purchase leves are $0-$25 (very light user), $'26-$143 (light user), $143-487 (medium user), and more than $488 per year (heavy user).

TABLE 3 First Discriminant Function and Group Centroids

Variables* Coefficients

Income, S40,000 or more .52 No Children< 18 -.45 Income>$20,000<$29,999 .30 College Graduate or Higher .29 I ncome>$30,000<$39,999 .25 Some College .23 Zero Hours Worked -. 19 Some High School -.18 Income<$ I 0,000 -. 15 Housewife .14 Working Spouse .14 One or Two Children<IS -.09 Married -.08 White .07 Retired Spouse -.06

Centroids Grand Mean

-I 0 +1 -.62 -.06 .10 .60 Very Light Light Medium Heavy

*The variables presently working, retired, working 40 or more hours per week, not a high school graduate, age 26-35, 36-45, 46-55, 55 plus, spouse a housewife, spouse working zero hours or 40 hours per week, and 3 or 4 children <18 were not retained in the stepwise procedure.

percent) . They accounted for 57 percent of the respondents . There was a very slight t endency for white r esponden t s to spend more in the in formal economy t h a n non-whi te respondents . Marr ied responden t s were more likely to be heavy users of in formal goods and services t h a n single or divorced respondents . Sixty percent of the respondents were mar r ied and they made up 70 percent of the heavy user category. Hav ing a spouse employed for forty hours or more per week was posit ively associated with heavy use of in formal suppliers , with 33 percent of the work ing spouses in the heavy user category (in compar i son to 17 percent in the very light user category) and 33 percent work ing 40 hours in c o m p a r i s o n to 19 percent in the very light user category. F ina l ly , there was a posit ive re la t ionship be tween the n u m b e r of chi ldren u n d e r 18 and purchase f rom informal suppl iers with 56 percent of the heavy user category hav ing one or more chi ldren in c o m p a r i s o n to 30 percent for the very light user category.

A clearer pic ture of the group differences and the var iables affecting g roup separa t ion can be ob ta ined by e x a m i n i n g the g roup cent ro ids and the ma jo r d i sc r iminan t funct ion . Table 3 presents the first d i s c r i m i n a n t func t ion (which accoun ted for 91 percent of the d i sc r imina t ing power avai lable in the fifteen var iables selected by the s tepwise p r o c e d u r e ) , the s t a n d a r d i z e d d i s c r i m i n a n t

TABLE 4 F Statistics*, Significances between Pairs of

Groups, and Classification Results

Group Group Very Light Light Medium

Light 5.75 (p<.0001 ) Medium 9.22 (p<.0001) 1.13 (p.3368) Heavy 23.38 (p<.0001) 7.66 (p<.0001) 5.07 (p<.0001)

*Each statistic has 15 and 1907 degrees of freedom. F Statistics are for analysis sample.

Classification Results Analysis Sample Validation Sample

Cases Correctly 37% 35% Classified Chance (modal 25% 25% category) Press Q, with ldf 143.71 95.59 Probability <.001 <.001



TABLE 5 Analysis of One-way ANOVA for Equality of Group

Means across the Four Purchase Categories

User Category Means Very

Variable Mean Light Light Medium Heavy

Income $0-9,999" .19 .33 .20 .16 .09 $10-19,999 . . . .

$20-29,999** .29 .24 .29 .29 .35 $30-39,999* .13 .08 .12 .16 .16 $40,000 plus* .12 .03 .09 .12 .24

Employment Presently

Working* .53 .42 .52 .57 .60 Unemployed . . . . . Retired** .10 .17 .10 .07 .04 Housewife .09 .08 .11 .09 .10

Hours Worked Per Week 0* .34 .46 .35 .30 .24 1-39 . . . . . 40 or more* .47 .38 .46 .50 .53

Education 1-12 years* .18 .29 .18 .14 .09 High School Diploma . . . . . Some College*** .20 .I5 .19 .23 .23 College Graduate

and/or Graduate Work* .25 .13 .24 .27 ,35

Age <25 . . . . . 26-35** .27 .21 .28 .28 .32 36-45*** .17 .12 .17 .18 .20 46-55 .14 .12 .13 .14 .16 56 plus* .25 .38 .24 .21 .16

White** .86 .81 .88 .85 .88

Married* .60 .53 .58 .59 .70

Spouse Employment Present

Working* .34 .23 .32 .35 .44 Unemployed . . . . . Retired** .05 .08 .08 .05 .02 Housewife .08 .08 ,08 .07 .08

Spouse Hours Worked Per Week 0* .58 .70 .60 .58 .45 1-39 . . . . . 40 or more* .32 .23 .29 .33 .45

Number of Children under 18 0* .57 .70 .57 .55 .44 I or 2* .34 .25 .33 .33 ,44 3 or 4"** .08 .05 .08 .10 .10 5 or more . . . . .

*P is <.05 **P is <.01

***P is <.001

- - indicates dummy variable category deleted for discriminant analysis

function coefficients (which represent the relative contribution of the associated variable to the function), and the group centroids. The zero point is the grand mean for all cases. Table 4 presents the matrix of pairwise F ratios, which is the significance test for the Mahalonobis distance between the groups, and the classification results.

Table 3 indicates that this function measures high income and education (positive) and presently not working or having graduated from high school (negative). The large separation between all the groups but the light in comparison to the medium is indicated by the group centroids in Table 3 and the matrix of pairwise F ratios in Table 4. Classification results for both the analysis and validation samples were significantly better than chance (p.<.001) indicating that the groups are both statistically and operationally different.

Table 5 lists the means and significance levels of the variables as they relate to the usage categories. The positive relationship between income, employment, hours worked, education, race, marital status, spouse employment, spouse hours worked, and number of children under eighteen are demonstrated by the table as is the negative relationship between age and number of children under eighteen.

SUMMARY AND CONCLUSION

This research was designed to reveal whether there is a consumer segment which is prone to deal with suppliers who operate at the fringes of legality (i.e., they sell legal goods or services but avoid licensing or tax requirements). An examination of the Chi-square, ANOVA, and user category means suggests the following consumer profiles:

Very light user segment: This group has a fairly well defined profile, tending to earn less than $10,000 per year. They are also the least educated (non-high school graduates), retired, possibly with a retired spouse, and unemployed or working part-time. They are also the oldest (over 56 years old) and living in households without children under 18 years old.

Light user segment: This group profile differs distinctly from those of the very light and heavy user groups. It most resembles the medium user segment. They are under 45, white, high school graduates earning less than $20,000 per year at full-time employment (more than 40 hours per week).

Medium user segment: This group is slightly better off and better educated than the light user segment, earning between $20,000 - $40,000 per year and having attended college. Like the light user segment they are under 45 and are working full-time.

Heavy user segment: This segment is the most upscale of the four segments. These consumers are working full-time, earn over $40,000 per year and have graduated from college or have done postgraduate work. They also tend to be younger (under 36), white, and have a spouse that is employed full-time. Finally, they are likely to have one or more children. This heavy user segment has a certain


CONSUMER PARTICIPATION 1N THE INFORMAL ECONOMY MC CROHAN & SMITH

degree of congruence with Skelly's (1984) "strategic noncomplier," who are aware of, and condone, all types of cheating across the board. Demographically they were described as the youngest (nearly half under 35), in white collar occupations, the most affluent, and well educated.

With the exception of the light-user versus the medium- user segment all the group combinations were statistically and operationally different from each other.

The existence of an informal supplier prone segment must be of concern to marketing practitioners, academics involved in consumer research, and public officials concerned with taxation and consumer policy issues. The marketing concerns would seem to center on retail institutions and marketing themes. It is very possible that the proliferation and increasing formalization of informal retailing institutions is a response to these market demands. For example, there are flea markets in the New York City metropolitan area where vendors provide return privileges and accept credit cards. Home centers, generic products, and bargain food outlets have a broader appeal than that of simple economics and may be appealing to consumers that prefer the trappings of informality. It may be possible for formal retailers to broaden their merchandising practices to appeal to this informal prone group since the demographic profile of the heavy user segment argues against the existence of informal markets as second class markets.

Possibly the most worrisome finding of this study is the apparent networking of the unethical to broaden their activities, thereby compounding an already complex issue. The consumer who underreports income and spends that income with informal suppliers, perhaps for music lessons or some house painting, has reduced the probability of the underreporting being identified because there will not be an audit trail on those expenditures. The fact that these consumers are affluent, well educated, and comparatively young is an additional concern.

There has been some conjecture that informal suppliers may provide a social benefit if the relationship between the formal and informal economies is countercyclical; during periods of high inflation and unemployment, informal suppliers can provide lower cost services on one side and employment on the other. While there may be some employment of the unemployed, the consumer segment identified as "informal supplier prone" does not appear to require any type of societal subsidy.

The preceding discussion suggests the need for further research on informal markets and their relation with formal markets. For example, the present study focused on demographics as they relate to household consumption levels. Future studies may explore consumer attitudes towards informal markets, motives for dealing with informal suppliers, as well as the communication process in the informal dyad.

It would also be advisable that future reserach investigate the behavioral and socioeconomic characteristics of the informal supplier prone consumer, with particular emphasis on testing the relationship between tax evasion and dealing with informal suppliers. This relationship has been suggested in the present study but is informed

speculation at best. Finally, future research should investigate whether

informal markets are countercyclical and the extent to which consumer profiles change as circumstances in the formal economy change.

FOOTNOTE ~For a definition of informal suppliers see Kevin F. McCrohan and James D.

Smith (1986),"A Consumer Expenditures Approach to Estimating the Size of the Underground Economy," Journal of Marketing, April, 43-61. In general they were defined as vendors who were perceived by the respondent as working on the side.

REFERENCES

Aitken, Sherrie S. and Laura Bonneville. 1980. A General Taxpayer Opinion Survey, CSR Incorporated, Washington, D.C.

Appleton, Lynn and Harold Grasmick. 1977. "Legal Punishment and Social Stigma: A Comparison of Two Deterrence Models." Social Science Quarterly (June): 15-28.

Frey, Bruno S. and Werner W. Pommerehne. 1984. "The Hidden Economy: State and Prospects for Measurement." The Review oflncome and Wealth 30 (March): 1-24,

Grasmick, Harold G. and Wilbur J. Scott. 1982. "Tax Evasion and Mechanisms of Social Control: A Comparison With Grand and Petty Theft." Journal of Economic Psychology 2:213-230.

Greenberg, Jerome Elaine Sherman, Martin Topoi, and Kenneth Cooperman, 1980. "The Itinerant Street Vendor: A Form of Non-Store Retailing." Journal of Retailing (Summer): 56, 66-80.

Income Tax Compliance By Individuals: Estimates For 1972 Through 1983. 1986 ICF Incorporated, Washington, D.C.

Kinsey, Karyl. 1984. Survey Data on Tax Compliance: A Compendium and Review. Chicago: American Bar Association.

Mason, Robert, Lyle Calvin and David Faulkenberry. 1975. Knowledge, Evasion and Public" Support For Oregon's Tax System. Corvallis, Oregon State University.

Mason, Robert and Helen Lowry. 1981. An Estimate of Income Tax Evasion in Oregon. Corvallis, Oregon: Oregon State University.

McCrohan, Kevin F. and James D. Smith. 1986. "A Consumer Expenditure Approach to Estimating the Size of the Underground Economy." Journal of Marketing 50 (April) 48-60.

Razzouk, Nabil and David Gourley. 1982. "Swap Meets: Profile of Shoppers." Arizona Business 9: 8-12.

Roper Reports 5. 1985. New York, The Roper Organization. Scott, Wilbur J. and Harold G. Grasmick. 1981. "Deterrence and Income Tax

Cheating: Testing Interaction Hypotheses in Utilitarian Theories." The Journal of Applied Behavioral Science 17: 395-408.

Self-Reported Tax Compliance: A Pilot Survey Report. 1980. Washington, D.C.: Westat.

Sherman, Elaine, Kevin F. McCrohan, and James D. Smith. 1985. "Informal Retailing: An Analysis of Products, Attitudes, and Expectations." In Advances in Consumer Research, Vol. 12. Ed. E. Hirschman and M. Holbrook, 204-208.

Skelly, Florence. 1984. Taxpayer Attitudes Study. New York: Yankelovich, Skelly and White.

Smith, James. 1982. The Measurement of Selected Income Flows in Informal Markets. Ann Arbor, MI: Survey Research Center, Institute for Social Research.

Third Annual Tax Study I and 2. 1979. New York: The Roper Organization.

Tittle, Charles R. 1980. Sanctions and Social Deviance: The Question of Deterrence. Praeger, New York.

Thurman, Quint C., Craig St. John, and Lisa Riggs. 1984. "Neutralization and Tax Evasion: How Effective Would a Moral Appeal Be In Improving Compliance to Tax Laws." Law and Policy 6: 309-327.

Trinkus, John. I980. "Buyer's Price Perception at a Flea Market. An lnformal Look." Psychological Reports 46: 266.



ABOUT THE AUTHORS KEVIN F. McCROHAN is a Professor of Marketing at George Mason University in Fairfax, Virginia. He received his academic training at New York University (BS), Baruch College (MBA) in International Business, (MBA) in Business Administration and the City University of New York (PhD). He has published in a number of academic journals including the Journal of Marketing, California Management Review, Journal of Economic Psychology and the Journal of the Market Research Society and he has been a consultant to a number of companies and government agencies.

JAMES D. SMITH is a Research Scientist at the Institute for Social Research, Survey Research Center, University of Michigan. He received his academic training at Drake University (BS, MS) and the University of Oklahoma (PhD). He has published in a wide variety of academic journals including the American Economic Review, Journal of Marketing, Review of Income and Wealth and the Journal o f Economic and Social Measurement and he has been a consultant to a number of companies and government agencies.


consumer participation in the informal economy

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