Most authors trying to measure the shadow economy still face the difficulty of a precise definition.1 According to one commonly used definition it comprises all currently unregistered economic activities that would contribute to the officially calculated gross national product if the activities were recorded.2 P. Smith (1994: 18) defines the shadow economy as ‘market-based production of goods and services, whether legal or illegal, that escapes detection in the official estimates of GDP’. Put differently, one of the broadest definitions is: ‘those economic activities and the income derived from them that circumvent or otherwise avoid government regulation, taxation or observation’.3 As these definitions still leave room for interpretation, Table 1 provides examples of a reasonable consensus definition of the underground (or shadow) economy according to its broadest definition.