The impact and relationship between moral and economic crimes on the size of the underground economy by MIMIC Method

The main objective of this study is estimating the underground economic indicators with emphasize on moral and economic crimes, using multiple indicators, multiple-causes (MIMIC) and maximum likelihood approaches during 1984-2011. The results of the research show that as hidden moral crimes is increased, underground economics amount will increase in the size. In addition, increase in administration corruption, divorce, illiteracy, Index of economic openness, size of government and per capita income are among the most important factors for the increased size of the underground economy. This study shows that the increased security in society, is the most important factor for decline in the underground economy and hidden crimes. Corruption is the most effective variable for increased hidden crimes, and illiteracy is the most effective variable on increased underground economy. In addition, increased hidden crimes will result in increased murder, theft and harassment, and as the underground economy size gets bigger, it will result in increased consumption of alcohol, liquidity, and energy consumption. Other findings of the research show that the less and most growth in hidden crimes were being in 1988 and 2009, respectively hidden and the less and the most underground economic growth was happened in years of 1987 and 2006, respectively.