Uncovering illegal and underground economies: The case of mafia extortion racketeering

• 成果类型: Article
• 署名作者: Piemontese, Lavinia
• 署名单位: Bocconi University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2023.104997
• 发表日期: 2023
• 关键词: Organized crime; Extortion racketeering; Resource misallocation; welfare loss; Within-industry OP covariance

摘要

I propose a new approach to quantify the economic cost of hidden economies and apply it to the case of mafia extortion in Northern Italy. To quantify the extortion rate, unobserved in the data, I first show that extortion racketeering is linked to resource misallocation. Then, I implement a structural estimation based on matching the observed misallocation in markets defined as mafia-infiltrated, with that predicted from a model whose parameters are estimated using data on non-mafia markets or calibrated from the literature. The results suggest that the share of output that the mafia extorts from firms ranges between 0.5 and 5 percent of firm-level output for those firms that are subject to extortion, with an implied loss between 0.6 and 8 percent of aggregate value added.