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Observing the Evolution of the Informal Sector from Space: A Municipal Approach 2013-2020

Author

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  • Rangel González Erick
  • Llamosas-Rosas Irving

Abstract

This document presents an alternative to measure informal economic activity at the municipal level for the 2013-2020 period in Mexico. Using satellite images of nightlight and microdata from the 2019 Economic Census, the formal and informal Value Added at the municipal level is estimated using a modified version of the model proposed by Tanaka and Keola (2017). Although there are some measurements in Mexico of informal economic activity, these are not available at the municipal level or on an annual basis. The results indicate that at the national level, most of the municipalities show decreases in their levels of informal activity during the 2013-2019 period, with the North and North central regions concentrating a higher proportion of these, while in the Center the majority of the municipalities remained unchanged in the percentage of informal Value Added. In contrast, an important part of the Southern municipalities registered increases in the percentage of their informal activity during the same period.

Suggested Citation

  • Rangel González Erick & Llamosas-Rosas Irving, 2021. "Observing the Evolution of the Informal Sector from Space: A Municipal Approach 2013-2020," Working Papers 2021-18, Banco de México.
    • Handle: RePEc:bdm:wpaper:2021-18
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    File URL: https://www.banxico.org.mx/publicaciones-y-prensa/documentos-de-investigacion-del-banco-de-mexico/%7BB8491B85-6FB0-3953-5EDB-B5397BBCDDD1%7D.pdf
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Informality; Value Added; Satellite Images of Luminosity; Municipalities;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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