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Data Appendix

Primary Data Sources

PolicyEngine-US

Current Population Survey (CPS)

IRS Statistics of Income (SOI)

Variable Definitions

Marginal Tax Rate (MTR): The tax rate on an additional dollar of income, including federal income tax, state income tax, and payroll taxes, accounting for all applicable credits and deductions.

Wage Rate: Hourly earnings calculated as annual labor income divided by annual hours worked (imputed as 2000 for full-time workers).

Tax Rate Uncertainty: Standard deviation of possible tax rates faced by a household, measured as either:

  1. Historical variation in effective rates over past 5 years
  2. Subjective uncertainty from survey responses
  3. Complexity-based measure using tax form interactions

Sample Construction

Starting with CPS microdata, we:

  1. Select households with positive labor income
  2. Exclude self-employed (different tax treatment)
  3. Match to PolicyEngine-US for tax calculations
  4. Compute marginal rates using $1000 income increments
  5. Weight observations using CPS household weights

Final sample: ~45,000 households representative of U.S. population

Robustness Sample Definitions

Alternative samples used in robustness checks:

Code and Replication

All analysis code is available at: https://github.com/maxghenis/disutility-of-uncertainty

Requirements:

Replication instructions provided in repository README.

Appendix
Technical Appendix