Valters Kaže Roberts Škapars Gatis Bolinskis


The paper explores the influence of consumer social values on the grey economy in Latvia. Measuring the grey economy is a complex issue which has not received a required attention in academic research thus resulting in a lack of consistent assessment methodologies. This has might result in serious implications for national economies limiting the implementation of the effective mitigation measures in economic policies. The objective of this paper is to explore and analyse the nature of dominating social values in Latvia, the impact of the above on related consumer behaviour and influence of the grey economy. The study suggests higher support for tax evasion driven by self-centred values which might have stimulating impact on the grey economy. Traditionalist, domestic and peaceful values are associated with prevailing acceptance towards properly paying taxes which represents an opportunity to raise taxation income assuming right communication strategy developed. Domestic value domain represents another opportunity for acceptance behaviour however proper tax settlement is lower among their individual priorities thus to be considered as an alert for attempts to increase tax burden. The findings of the study represent an interest both from academic and national fiscal planning perspective. JEL: A13, A14, D12, H26, H31. Keywords: social values, grey economy estimation, tax evasion, purchasing behaviour, Latvia.