Friday, December 18, 2009

Incentives and Creativity: Evidence from the Academic Life Sciences

My friend Julianne alerted me to this paper by Pierre Azoulay, Joshua S. Gra Zivin and Gustavo Manso:

Despite its presumed role as an engine of economic growth, we know surprisingly little about the drivers of scienti c creativity. In this paper, we exploit key di erences across funding streams within the academic life sciences to estimate the impact of incentives on the rate and direction of scienti c exploration. Speci cally, we study the careers of investigators of the Howard Hughes Medical Institute (HHMI), which tolerates early failure, rewards longterm success, and gives its appointees great freedom to experiment; and grantees from the National Institute of Health, which are subject to short review cycles, pre-de ned deliverables, and renewal policies unforgiving of failure. Using a combination of propensity-score weighting and di erence-in-di erences estimation strategies, we nd that HHMI investigators produce high-impact papers at a much higher rate than two control groups of similarly-accomplished NIH-funded scientists. Moreover, the direction of their research changes in ways that suggest the program induces them to explore novel lines of inquiry.

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