Because estimating the size and / or composition of the unrecorded market often involves conjecture and assumption-based modeling, it is typically preferable to use a combination of field research and desk research approaches to validate both the data inputs and the modeled outputs.
Combining Expert Surveys, Store Visits, and Desk Research (Value Chain Analysis)
A combination of desk research (which gathers available information that includes industry and government data on the legal market, international trade, and raw materials production) and field research (in the form of store visits and trade, or expert, interviews), value chain analysis is a supply-side method that uses direct / indirect and top-down / bottom-up approaches to size the unrecorded market (see Illustrative Example D).
Illustrative Example D.
As with all approaches to measuring the unrecorded market, lack of data and knowledgeable sources can pose a challenge. For this reason, the bottom-up approach of piecing together each category to estimate the total market can be desirable. Top-down inputs from external sources on the unrecorded market's share of the total market tend to be more difficult to gather and may not include all segments of the unrecorded market. Speaking with both legal and illegal operators across the supply chain
may allow the researcher to fill in data gaps, although feasibility assessments should consider interviewer safety and other security issues specific to each country when considering interviewing illegal actors. By mapping the entire supply chain, this approach provides detail on how unrecorded products reach consumers (see Figure 3).
Limitations of value chain analysis include those inherent in expert surveys and store visits. Also, it may be harder for this methodology to capture parts of the unrecorded market for which the demand side (i.e., consumer population) is likely to have more complete information compared to the supply side ― such as homemade and surrogate consumption.