Journal Article
No. 2016-14 | June 17, 2016
Mustafa Metin Basbay, Ceyhun Elgin and Orhan Torul
Energy Consumption and the Size of the Informal Economy


In this paper, the authors empirically investigate the relationship between energy consumption and the size of the informal economy. Relying on panel data regression models, their results show that at the aggregate level, energy intensity is inversely related to the size of the informal sector, providing actual empirical evidence on the presence of high labor and low capital intensity in the informal economy. Furthermore, the authors also find some support towards the presence of non-linearity and asymmetry in this relationship.

Data Set

JEL Classification:

O17, O13, P48, E26


Cite As

Mustafa Metin Basbay, Ceyhun Elgin, and Orhan Torul (2016). Energy Consumption and the Size of the Informal Economy. Economics: The Open-Access, Open-Assessment E-Journal, 10 (2016-14): 1–28.

Comments and Questions

Anonymous - Unpaid electricity bills
June 20, 2016 - 10:50 | Author's CV
Hello, very interesting article. However, I am wondering why the method of unpaid or unregistered consumption was not used. Also, There are very good papers in Latin America that are unfortunatelly not in English but google translator is now a pretty good resource. Also, I miss the basic literature and methodologies on indirect measurement of the informal economy.

Anonymous - response
June 29, 2016 - 13:06
thank you for your interest on our paper. The methodology we use to estimate the size of the informal sector is well explained in the below paper: