Opportunities and Benefits as Determinants of the Direction of Scientific Research

51 Pages Posted: 19 Jun 2010

See all articles by Jay Bhattacharya

Jay Bhattacharya

Stanford University - Center for Primary Care and Outcomes Research; National Bureau of Economic Research (NBER)

Mikko Packalen

University of Waterloo - Department of Economics

Date Written: June 18, 2010

Abstract

Scientific research and private-sector technological innovation are different in terms of objectives, constraints, and organizational forms. For example, the for-profit objective that drives private-sector innovation is absent from much of scientific research, and individual researchers have many times more control in scientific research than in private-sector innovation. These differences and the lack of any obvious objective that would drive the direction of scientific research raise the possibility that the direction of scientific research is exogenous in the sense that it may not be influenced by factors such as the quality of research opportunities and the expected benefit from research that not only drive private-sector innovation but also in part determine the socially optimal allocation of research. Alternatively, some – yet largely unexplored – mechanisms drive also the direction of scientific research to respond to these factors. In this paper we test these two competing hypotheses of scientific research. In particular, we examine whether the composition of medical research responds to changes in disease incidence and research opportunities. The extent of inventive activity is measured from the MEDLINE database on 16 million biomedical publications. We match these data with data on disease incidence. We develop and apply a method for estimating the quality of research opportunities from structural productivity parameters. Our results show that the direction of medical research responds to changes in disease incidence and research opportunities.

Keywords: Scientific Research, Private-Sector Innovation, Induced Innovation, Research Opportunity, Technological Opportunity, Non-Profit Incentives, Medicine

JEL Classification: O31, O33, I12, L65

Suggested Citation

Bhattacharya, Jayanta and Packalen, Mikko, Opportunities and Benefits as Determinants of the Direction of Scientific Research (June 18, 2010). Available at SSRN: https://ssrn.com/abstract=1626945 or http://dx.doi.org/10.2139/ssrn.1626945

Jayanta Bhattacharya

Stanford University - Center for Primary Care and Outcomes Research ( email )

Center for Health Policy
179 Encina Commons
Stanford, CA 94305-6019
United States
650-736-0404 (Phone)
650-723-1919 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mikko Packalen (Contact Author)

University of Waterloo - Department of Economics ( email )

Waterloo, Ontario N2L 3G1
Canada

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