The Matthew effect, research productivity, and the dynamic allocation of NIH grants

Y. J. Jeff Qiu

RAND Journal of Economics, 2023, vol. 54, issue 1, 135-164

Abstract: Funding is important for research. However, research funding may suffer from the Matthew effect: the more researchers already have, the more they will be given. I develop an empirical framework to study how the National Institutes of Health (NIH) could allocate funding in a dynamically optimal manner by balancing funds between young and veteran principal investigators (PIs). I find that the discount factor that rationalizes NIH's funding behavior is about 0.75, implying it may underfund young PIs. Moreover, a temporary funding cut would have long‐lasting effects on overall research output through its adverse impact on investment in young PIs.

Date: 2023
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https://doi.org/10.1111/1756-2171.12433

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