[One should be very careful in using the "non-informative" priors suggested in the Bayesian econometric literature for the covariance matrix of residuals in simultaneous equations models. To highlight the inadequacies of the prior, this paper shows that the prior leads to sharp posterior distributions even in under identified models. Similar problems also arise with the 2SLS method, but one can apply tests for underidentification. Something similar has to be done in the Bayesian context.]

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.

A DVERTISING is a subject that has held considerable interest for economists, especially with respect to the relationship between and market structure. It is commonly alleged that is inconsistent with perfect competition, but is to be found where there is monopolistic competition (however, see -Telser, 1964). A correlation between and market structure will be expected under two hypotheses which differ with respect to the direction of causality: (1) can act as a barrier to entry which allows market power to be developed; and, (2) is found under monopolistic competition as a result of optimization in light of the demand curves faced by market participants. This paper considers the second hypothesis; specifically, that as market structure in SMSAs deviates further from perfect competition, savings and loan associations (SLAs) make greater use of to attract deposits. The savings and loan industry provides a good data set since entry is determined by state and federal regulatory bodies. Thus, market structure can be taken as a given variable to which SLAs react rather than as an endogenous variable that may have been influenced by advertising. We can, therefore, specifically test the hypothesis that market structure affects in the absence of a simultaneous relationship in which affects market structure. In addition, the concept of market structure is expanded to consider the effect that branching by SLAs may have on advertising. The hypothesis that market structure is a causal factor in the decision can be derived from a model of the determination of the optimal price and expenditure for a monopolist, given that the demand for the product is a function of as well as price. The ratio of expenditures to sales revenue (referred to as advertising intensity) depends on the price elasticity of demand and the marginal value product of advertising.' This result may be expressed as,

[Excerpt] In this paper, we show how labor turnover considerations can be integrated into the human investment theory of migration and demonstrate that such a model provides a much better explanation for migration rates into major metropolitan areas than the conventionally-used unemployment rate. The method used here may be of interest as well to researchers working on other human investment problems that also have a multi-period dimension.

THE economic and demographic determinants of the labor force behavior of married females have been studied intensively.' Many of the important variables have now been isolated: education, age, income of husband, number of children, etc. However, as will be discussed below, the existing literature pays insufficient attention to the fact that U.S. income tax laws have placed a large burden on the earnings of married women. When a married couple chooses to enjoy the tax advantages of filing jointly, the first dollar earned by the wife is in effect taxed at the same marginal rate as the last dollar earned by the husband.2 The purpose of this paper is to present some empirical results on the impact of tax rates on the labor supply of married women. Explicit attention is focused on the extent to which individuals react to net rather than gross wages. The evidence strongly supports the view that it is the net wage that matters in the hours of work decision. Section I briefly discusses how taxes have been treated traditionally in the analysis of labor supply. Section II presents a model for examining the impact of taxes on labor supply, and section III contains the results of an empirical test of this model. A concluding section discusses work in progress which will refine and extend the results of this paper.

In this paper we present evidence on the existence of seasonality in monthly rates of return on the New York Stock Exchange from 1904–1974. With the exception of the 1929–1940 period, there are statistically significant differences in mean returns among months due primarily to large January returns. Dispersion measures reveal no consistent seasonal patterns and the characteristic exponent seems invariant among months. We also explore possible implications of the observed seasonality for the capital asset pricing model and other research.