Productivity Beliefs and Efficiency in Science

Fabio Bertolotti, Kyle Myers and Wei Yang Tham

No 34000, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a method to estimate producers’ productivity beliefs in settings where output quantities and input prices are unobservable, and we use it to evaluate allocative efficiency in the market for science. Our model of researchers’ labor supply shows that their willingness to pay for their two key inputs, funding and time, reveals their underlying productivity beliefs. We estimate the model’s parameters using data from a nationally representative survey of research-active professors from all major fields of science. We find that the distribution of research productivity is highly skewed. Using these estimates, we assess the market’s allocative efficiency by comparing actual input allocations to optimal allocations given various objectives. Overall, the market for science is moderately efficient at maximizing output and researchers’ utility: actual input levels are positively correlated with the optimal levels implied by the model. However, the wedge between researchers’ actual and optimal input levels is often significant and difficult to predict. Our estimates imply that total budgets would need to increase by roughly 40% under actual allocations in order to achieve the same growth in scientific output that we predict under alternative allocations of the current budget. Scaling to the population level, this equates to billions of dollars in funding — there are substantial gains from developing new ways of identifying and supporting productive scientists.

JEL-codes: D24 M5 O3 O30 O31 O32 O38 O40 (search for similar items in EconPapers)
Date: 2025-07
Note: PR
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34000.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:34000

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34000
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().