variables-precisely the case examined by Gerkinghe finds that moments of the finite-sample distribution for the TSLS estimator exist only up to the number of overidentifying restrictions. In the context of equations (1) all structural equations are exactly identified. It follows that none of the moments of this distribution exist. One may obtain parameter estimates, but associated tests of significance are simply not meaningful. The empirical results established by Gerking must be questioned on these grounds. It should also be recognized that any estimator used to obtain structural coefficients in this model must ensure that both the input and the output identities are satisfied. When coefficient estimates are obtained they must be such that implied interindustry flows (Z13 = a^X1) are consistent with the equality of gross output and gross outlay. Without this constraint, comparative static results based on input-output coefficients are not meaningful.

This paper uses a survey of risk beliefs about skin cancer to provide new evidence on how people view risky situations. Empirical results presented are based on a measure of risk beliefs held at the time of the survey. Key findings are that risk beliefs about skin cancer account for factors including skin type, complexion, and sunlight exposure history. Also, the connection between risk beliefs and willingness to pay is explored by using reservation prices for a sun protection product. A new method for treating joint production in a household production framework is developed to support this analysis.

Two contributions are made toward understanding variation in marginal value of safety estimates from labor-market studies. First, marginal safety values are obtained from direct measurement of workers' perceived job-related accidental death rates. Second, wage-risk relationships are explored for several categories of workers using the hedonic price method. Statistically significant relationships found for unionized, blue collar, and blue collar-unionized workers imply marginal safety values of 1.5, 1.18, and 2.10 million dollars, respectively. Further results in this paper suggest that alternative methods are needed to measure marginal safety values for workers in other categories.

Interregional differences in average wages and earnings have been observed particularly in the North and South of the United States ever since the mid-1800s. That observation has motivated several empirical attempts to determine the source of those differentials, measured both in nominal and real terms, and to explain why they have been maintained over time. The general conclusion reached by the overwhelming majority of these studies is that the labor market has not eliminated these wage differentials even in the face of substantial interregional migration. This result has at least two alternative interpretations. First, it would appear to contradict the theory of compensating differences as applied to the labor market (Thaler and Rosen, 1975), which stresses that under the assumptions of perfect information, free geographic and intersectoral labor mobility, and homogeneous consumer tastes, the nominal wage rates of workers who have similar human capital characteristics, live and work in similar environments and experience similar living costs, are driven to equality. Second, this result may only reflect an aggregation error. In other words, there may be several types of labor that are each paid different equilibrium wage rates and comprise different percentages of the workforce in each region. Even if the real wage paid to each class of workers is interregionally invariant, a situation that instead would support the theory of compensating differences, failure to distinguish accurately between labor types could produce the illusion of a wage differential. This paper considers the two alternative interpretations given above as to why interregional wage differentials might exist. Hedonic real wage equations are estimated for four regions of the United States using observations on individual household heads drawn from the 1976 Panel Study in Income Dynamics (PSID). This sample is of interest because the 1976 PSID data contain unusually detailed measures of education, work experience and occupation, as well as information on workplace and job characteristics. Thus, a more complete specification of the wage equation is permitted and the possibility of aggregation error is reduced, particularly in comparison with other interregional wage differential studies. Several of these studies, for example, have been based on aggregate data from the Census of Manufactures (Fuchs and Perlman, 1960; Gallaway, 1963; Scully, 1969; and Coelho and Ghali, 1971) which provide no direct measurements on the human capital of workers. The remainder of the discussion is organized into three sections. Section II specifies the wage equation and describes the PSID data. Section III, then, reports empirical results which are consistent with the findings, based on aggregate data, of Bellante (1979) and Coelho and Ghali (1971) in that they support the theory of compensating differences. More specifically, for full-time workers, the rewards to attributes relevant in determining real wages apparently are interregionally invariant. However, because this result conflicts with most previous research on interregional wage differentials based on aggregate data and virtually all such research based on microdata (Welch, 1966; Hanoch, 1967; Hanushek, 1973, 1981; Hirsch, 1978; and Sahling and Smith, 1983), a number of empirical comparisons are made between the present study and the approaches taken by other investigators. Conclusions and implications are drawn out in section IV.

A health-oriented choice model is developed in which individuals are viewed as producers of health and good health is desired for both consumption and investment purposes. Individuals are able to adjust their consumption of medical care in order to defend against reductions in air quality. A compensating variation type marginal willingness to pay expression is derived for improved air quality and the model is tested using cross-sectional data on employed adult residents of St. Louis, Missouri. Estimates of marginal willingness to pay for the average employed person are derived for a 30% reduction in ozone. These values range from $18.45 to $24.48 per year.