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Evaluating the multifarious motives for acquiring goods and services from the informal sector in Central and Eastern Europe

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  • Colin C. Williams
  • Ioana A. Horodnic

Abstract

The aim of this paper is to evaluate which consumers in Central and Eastern Europe are more likely to acquire goods and services from the informal economy and to unravel their multifarious motives for doing so. Analysing 11,131 face-to-face structured interviews conducted in 11 Central and Eastern European (CEE) countries in 2013, a logit regression analysis reveals that some groups purchase from the informal economy to obtain a lower price, others for social or redistributive rationales, and yet others due to the failures of the formal economy in terms of the availability, speed and quality of provision. The implications for theorizing and tackling the informal economy are then explored.

Suggested Citation

  • Colin C. Williams & Ioana A. Horodnic, 2016. "Evaluating the multifarious motives for acquiring goods and services from the informal sector in Central and Eastern Europe," Journal of Contemporary Central and Eastern Europe, Taylor & Francis Journals, vol. 24(3), pages 321-338, September.
    • Handle: RePEc:taf:cdebxx:v:24:y:2016:i:3:p:321-338
    DOI: 10.1080/0965156X.2016.1259915
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    References listed on IDEAS

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    1. Merike Kukk & Karsten Staehr, 2014. "Income underreporting by households with business income: evidence from Estonia," Post-Communist Economies, Taylor & Francis Journals, vol. 26(2), pages 257-276, June.
    2. Anna Lukiyanova, 2015. "Earnings inequality and informal employment in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 469-516, April.
    3. Williams, Colin C. & Martinez-Perez, Alvaro, 2014. "Why do consumers purchase goods and services in the informal economy?," Journal of Business Research, Elsevier, vol. 67(5), pages 802-806.
    4. Richard White & Colin Williams, 2010. "Re-thinking Monetary Exchange: Some Lessons from England," Review of Social Economy, Taylor & Francis Journals, vol. 68(3), pages 317-338.
    5. Putniņš, Tālis J. & Sauka, Arnis, 2015. "Measuring the shadow economy using company managers," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 471-490.
    6. Colin C. Williams, 2013. "Evaluating cross-national variations in the extent and nature of informal employment in the European Union," Industrial Relations Journal, Wiley Blackwell, vol. 44(5-6), pages 479-494, November.
    7. Colin C. Williams & Josip Franic, 2016. "Explaining Participation in the Informal Economy in Post-Socialist Societies: A Study of the Asymmetry between Formal and Informal Institutions in Croatia," Journal of Contemporary Central and Eastern Europe, Taylor & Francis Journals, vol. 24(1), pages 51-65, January.
    8. Kirchler,Erich, 2007. "The Economic Psychology of Tax Behaviour," Cambridge Books, Cambridge University Press, number 9780521876742, January.
    9. Colin C. Williams, 2006. "How much for cash? Tackling the cash-in-hand ethos in the household services sector," The Service Industries Journal, Taylor & Francis Journals, vol. 26(5), pages 479-492, July.
    10. Theresa Aldridge & Jane Tooke & Roger Lee & Andrew Leyshon & Nigel Thrift & Colin Williams, 2001. "Recasting Work: The Example of Local Exchange Trading Schemes," Work, Employment & Society, British Sociological Association, vol. 15(3), pages 565-579, September.
    11. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
    12. Colin C. Williams & Muhammad S. Shahid, 2016. "Informal entrepreneurship and institutional theory: explaining the varying degrees of (in)formalization of entrepreneurs in Pakistan," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 28(1-2), pages 1-25, January.
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    Cited by:

    1. Colin C. Williams, 2023. "A Modern Guide to the Informal Economy," Books, Edward Elgar Publishing, number 18668.

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