BTW I’m not of course expecting a sophisticated discussion of research design in a mass email. But you’d expect the various blogs and websites discussing the issue, the statement from the editor of the field’s flagship journal, the special issue highlighting NSF-funded research, etc. at least to acknowledge these kinds of concerns. They seem blithely unaware that to the typical US taxpayer their pleas come across as simple rent-seeking.

If there is something they would have worked on in the absence of the grant that has a lower value than the stuff they would work on on the grant we don’t want them working on it. We want to bid them away. The trouble is, we’d like a sure method of valuing science that has social payoffs.

Unfortunately political allocation can’t give us that. Unfortunately, the market can’t either.

So we’ve gotta do our best. But I don’t see why it’s a bad thing to bid people off other projects.

And again – insofar as their is bidding off other work, it’s a short-term phenomenon. In the long-run, so long as we do our best to approximate the social value of this research, the bidding away that goes on is bidding away that we’d like to see happen.

I think the issue ultimately should be attaching the right social value to publicly funded research, not being concerned about short-run inelasticities that Goolsbee’s work picks up. If we get the valuation right none of the bidding away should bother us.

And I think good social science tells us two things: positive externalities are underfunded by the market and corner solutions are rarely optimal except in some unusual circumstances. So I think good social science is on the APSA’s side here. Of course there’s a lot more legwork to do to determine the right amount of funding.

Part of the issue with Goolsbee is that he’s looking at relatively short term impacts. Economists studying this labor market since at least the 50s have noted that one of its most important features is a high short-run inelasticity of supply. So yes, in the short run you have much higher wage effects than quantity effects.

This doesn’t hold true in the long run. It’s a good study of Goolsbee’s, consistent with the rest of the literature, but I think it’s often poorly (and for that reason over-) cited.

My edited volume is at 2,121,862, mostly because my mother didn’t buy a copy. I think that would bump me into the top 2 million.