The European Research Council (ERC) supports top researchers based in Europe with very generous funding to focus on their research. Receiving an ERC grant therefore is not only a financial achievement but also a great recognition of a researcher's previous work. Michelle Sovinsky, who joined MaCCI in 2015, will use the grant to continue her research on illegal markets. Illegal markets make up a significant part of the world economy, with illicit substances and counterfeit markets reaching an annual value of up to $300 billion each. This economic activity, however, remains unobserved due to its criminal character, and is therefore not incorporated into the economic models that policy makers rely on to make ​their decisions. In her ERC grant application, Michelle Sovinsky proposes to develop novel models that would account for unobserved ​economic behaviour. Her research will focus on three yet under-studied spheres: consumption of illicit drugs, counterfeit production, and illegal counter-competitive actions of legal firms. Prof. Sovinsky will propose and test new estimation methods to better analyse each of these three spheres. The research may provide policy makers with useful tools to understand the illicit markets despite their obscure nature.