Estimated labor supply functions are important tools when designing an optimal income tax or calculating the effect of tax reforms. It is therefore of large importance to use estimation methods that give reliable results and to know their properties. In this paper Monte Carlo simulations are...

In the analysis of tax reform, when equity is traded off against efficiency, the measurement of the latter requires us to know how tax- induced price changes affect quantities supplied and demanded. In this paper, we present various econometric procedures for estimating how taxes affect demand....