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Productivity Beliefs and Efficiency in Science

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  • Fabio Bertolotti
  • Kyle Myers
  • Wei Yang Tham

Abstract

We develop a method to estimate producers' productivity beliefs when output quantities and input prices are unobservable, and we use it to evaluate the market for science. Our model of researchers' labor supply shows how their willingness to pay for inputs reveals their productivity beliefs. We estimate the model's parameters using data from a nationally representative survey of researchers and find the distribution of productivity to be very skewed. Our counterfactuals indicate that a more efficient allocation of the current budget could be worth billions of dollars. There are substantial gains from developing new ways of identifying talented scientists.

Suggested Citation

  • Fabio Bertolotti & Kyle Myers & Wei Yang Tham, 2025. "Productivity Beliefs and Efficiency in Science," Papers 2510.24916, arXiv.org.
    • Handle: RePEc:arx:papers:2510.24916
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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