Factors affecting informal economy of rural Turkey

Abstract

In this study, the informal economy in the rural areas of Turkey has been measured and factors affecting the informal economy have been analyzed. The informal economy has been discussed with regards to three main issues, namely unpaid household labor force usage, own consumption of crop and animal products and informal sales. Although the household labor force is mainly used in farms for agricultural and off-farm activities, the rate of idle labor has been found to be highly significant. It has been found that milk has the largest share of animal produce values consumed by the household, while particularly processed milk products are sold informally and that the consumption and sales values of animal produce processed in the households are required to be added to the unrecorded value calculation. Consumption of crops varies depending on the type of product. The own consumption ratio of crops is affected by the size of the enterprise, the number of individuals in the households and particularly the access to the markets of the enterprises in each region. An average informal value of 6,400.04 USD has been calculated per household, which is higher than the farm income, accounting for 4/5 of total household income. This can be attributed to the fact that the farms are generally small family enterprises with limited market-access opportunities. © 2007 Asian Network for Scientific Information.