Polarizabilities and hyperpolarizabilities and their frequency dispersions are calculated for para-nitroaniline immersed in solution using a reaction field response model. Single- and multiconfigurational wave functions are self-consistently optimized in the presence of the reaction field of the solvent and used as reference states for response calculations of the dipole spectra, polarizabilities, and hyperpolarizabilities at zero and finite frequencies. The hyperpolarizabilities are obtained either by finite field generated analytical first polarizability calculations or using a two-state model where all quantities are calculated from the reaction field response method. The effect of the polarity of the solvent on the quantities entering the two-state model (the ground and charge transfer state dipole and transition moments and transition energy) are investigated in some detail. All are found to contribute to the steep dependence of the hyperpolarizability as a function of the polarity of the solvent. The relative variation of the hyperpolarizability with the polarity of the solvent is well reproduced at correlated level calculations.