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Traded goods and services

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Some examples of underground economic activities include: Sexual exploitation and forced labor edit Prostitution is illegal or highly regulated in many countries across the world. These places form a classic study of the underground economy, because of consistent high demand from customers, relatively high pay, but labor-intensive and low skilled work, which attracts a continual supply of workers. While prostitution exists in every country, studies show that it tends to flourish more in poorer countries, and in areas with large numbers of unattached men, such as around military bases. For instance, an empirical study showed that the supply of prostitutes rose abruptly in Denver and Minneapolis in 2008 when the Democratic and Republican National Conventions took place there. Prostitutes in the black market generally operate with some degree of secrecy, sometimes negotiating prices and activities through codewords and subtle gestures. In countries such as Germany or the Netherlands, wher...
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Consumer issues

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No government, no global nonprofit, no multinational enterprise can seriously claim to be able to replace the 1.8 billion jobs created by the economic underground. In truth, the best hope for growth in most emerging economies lies in the shadows. — Global Bazaar , Scientific American Even when the underground market offers lower prices, consumers still have an incentive to buy on the legal market when possible, because: They may prefer legal suppliers, as they are easier to contact and can be held accountable for faults; In some jurisdictions, such as the United States, customers may be charged with a criminal offense if they knowingly participate in the black economy, even as a consumer; They may have a moral dislike of black marketing; In some jurisdictions (such as England and Wales), consumers found to be in possession of stolen goods will have them taken away if they are traced, even if they did not know they were stolen. Though they themselves will not usually face crimin...
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Background

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The literature on the black market has not established a common terminology and has instead offered many synonyms including: subterranean; hidden; grey; shadow; informal; clandestine; illegal; unobserved; unreported; unrecorded; second; parallel and black. There is no single underground economy; there are many. These underground economies are omnipresent, existing in market oriented as well as in centrally planned nations, be they developed or developing. Those engaged in underground activities circumvent, escape or are excluded from the institutional system of rules, rights, regulations and enforcement penalties that govern formal agents engaged in production and exchange. Different types of underground activities are distinguished according to the particular institutional rules that they violate. Four major underground economies can be identified: the illegal economy the unreported economy the unrecorded economy the informal economy The "illegal economy" consists of the ...
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