Spending on Science, new paper

We have a new paper on this: Goodridge, P., Haskel, J., Hughes, A., and Wallis, G., (2015). The contribution of public and private R&D to UK productivity growth, Imperial College Discussion Paper, 2015/03, March 2015,   available at https://spiral.imperial.ac.uk:8443/bitstream/10044/1/21171/2/Haskel%202015-03.pdf

The abstract  is

We estimate the contribution of public and private R&D to UK productivity growth on industry data, 1992-2007. R&D affects productivity growth via (1) R&D input, valued at competitive factor shares and (2) (Domar-Hulten weighted) industry TFP growth if there are (a) within-industry spillovers (b) between-industry spillovers and (c) spillovers from public-sector R&D to the market sector. Thus effects depend upon factor shares, spillovers and industrial structure. We estimate all these effects and perform counter-factual experiments such as e.g. additional government spending on the science budget, increased manufacturing R&D spending and the effects of such changes with a different industrial structure.


Our central estimate of the rate of return to public spending on science is  20%.

This the article behind my interview in the FT this weekend, http://www.ft.com/intl/cms/s/2/7da2852c-e3af-11e4-9a82-00144feab7de.html#axzz3XZSthOA9

Various teaching links

Some teaching cases taken from this month's CEP Centrepiece magazine.

1. Selling UK citizenship.  We will learn about how markets allocate according to willingness to pay. Here's a proposal to allocate citizenship this way.

2. Complementary goods. If you ban YouTube videos, you might cause sales of music to fall if there are inter-related demands.  Exactly this happens. 

3. Productivity spillovers.  How wikipedia content spills over to benefit others.