PAYROLL AND PROGRESSIVE INCOME taxes play an enormous role in the American fiscal system. It is therefore of some importance to know the extent to which they influence work incentives. The purpose of this study is to present some econometric evidence on the effects of taxes on married women, a group of growing importance in the American labor force.2 A testable model of labor supply is developed which permits statistical estimation of a coefficient of tax perception. Unlike previous models of labor supply, it allows for the possibility that the wage may depend on the number of hours worked. Contrary to much of the literature, the results of this paper strongly suggest that marginal tax rates do have an important impact on labor force behavior. This section reviews briefly the past thought on this problem. Section 2 develops a model to explain work decisions when an individual faces a whole set of wagehour combinations, rather than a given wage independent of the number of hours he works. In Section 3 this model is modified to permit an explicit test of whether or not taxes affect individuals' labor supply decisions. Estimation problems are discussed at length, and the empirical results are presented. A concluding section contains a summary and suggestions for future research.

MANY COMMODITIES can be viewed as bundles of individual attributes for which no explicit markets exist. It is often of interest to estimate structural demand and supply functions for these attributes, but the absence of directly observable attribute prices poses a problem for such estimation. In an influential paper published several years ago, Rosen [3] proposed an estimation procedure to surmount this problem. This procedure has since been used in a number of applications (see, for example, Harrison and Rubinfeld [2] or Witte, et al. [4]). The purpose of this note is to point out certain pitfalls in Rosen's procedure, which, if ignored, could lead to major identification problems. In Section 2 we summarize briefly the key aspects of Rosen's method as it has been applied in the literature. Section 3 discusses the potential problems inherent in this procedure and provides an example. Section 4 concludes with a few suggestions for future research.

Economists have been paying increasing attention to the study of situations in which csumers face a discrete rather than a continous set of choices.Such models are potentially very important in evaluating the impact of government programs upon consi.mterwelfare.But very little has been said in general regarding the tools of applied welfare economics in discrete choice situations.This paper shows how the conventional methods of applied welfare economics can be modified to handle such cases.It focuses on the cornputation of the excess burden of taxation, and the evaluation of gua].itychange.The results are applied to stochastic utility models, including the popular cases of prohit and logit analysis.Throughout, the ernp)-asis is on providing rigorous guidelines for carrying out applied work.

This paper considers estimation and testing of vector autoregressio n coefficients in panel data, and applies the techniques to analyze the dynamic relationships between wages an d hours worked in two samples of American males. The model allows for nonstationary individual effects and is estimated by applying instrumental variables to the quasi-differenced autoregressive equations. The empirical results suggest the absence of lagged hours in the wage forecasting equation. The results also show that lagged hours is important in the hours equation.