In normative public economics it is crucial to know how fast the marginal utility of income declines as income increases. One needs this parameter for cost-bene[fi]t analysis, for optimal taxation and for the (Atkinson) measurement of inequality. We estimate this parameter using four large...

This paper is a preliminary draft of a chapter for the new Handbook of Labour Economics edited by Orley Ashenfelter and David Card and Published by North Holland.

Data from Unemployment in Britain, Economica, 1986, 53, 5121-5169. Firm-level panel data, 1976 to 1984 on 140 firms. Used in Arellano and Bond, Rev. Econ. Stud. 1991, referenced in Stata manual (xtabond) and Ox manual for DPD package.