Innovation is frequently underemphasized in the economics literature because it is qualitative by nature, and qualitative changes are hard to measure. A new NBER paper by three economists, Lakdawalla, Reif, and Malani, makes some progress toward a better measure of innovation, specifically innovation in health care. They show that by ignoring the way medical innovations help reduce risk, previous studies have tended to underestimate the true value of medical innovations—by as much as 30-80%.
To arrive at their estimates the authors use a new way of valuing risk. Our health is inherently risky, which is why we have health insurance for smoothing expenses out over time and between people. Innovation is also risky, which is why investors in startups often expect high returns and we often look to the government to fund basic research. But Lakdawalla, Reif, and Malani show that risks don’t always add up—sometimes they cancel out. Risks taken to innovate and create new health products and treatments can reduce health risks for people, because new innovations help keep us safer and healthier.
When risks taken in health innovation pay off, the reward they bring isn’t just the
This article was originally published in The Huffington Post. It is co-authored by Val Giddings and Jon Entine
Recently on the Huffington Post we came across a disturbing article – an attack by Jeffrey Smith on two respected university professors who apply a critical eye to the claims made by various advocates alleging dangers to human health linked to genetically modified organisms (GMOs.)
Smith, if you are not familiar with him, heads up a one-man band rabidly anti-GMO organization known as the Institute for Responsible Technology–he and his organization are controversial to say the least, but more on that later.
The subject of the attack piece was co-written by University of Illinois emeritus professor Bruce Chassy and University of Melbourne geneticist David Tribe. It appears on the website of AcademicsReview, an independent non-profit set up by the scholars to address the maelstrom of misinformation that passes for debate on the GMO issue. In one of their most pointed and heavily circulated critiques, Chassy and Tribe examine one of Smith’s two self-published books that supposedly ‘prove’ that GMO foods are reckless and dangerous.
Chassy and Tribe’s critique titled “Yogic Flying
Earlier this week the Center for Public Integrity (CPI) published what purports to be an investigative look at broadband competition, speed, and prices, concluding that “U.S. Internet users pay more and have fewer choices than Europeans.” This is a common myth that we at ITIF have long worked to dispel, but apparently some myths die hard.
CPI duplicates the usual argument made in this space, attempting to compare a handful of French and U.S. cities, claiming that because French cities offer more broadband “choices,” they have lower price, and higher adoption. CPI suggests that the supposed success demonstrated in their “snapshot” should push us to emulate France’s open access policies. There are a number of problems with this picture.
CPI compares a set of advertised broadband rates in a handful of French cities to American cities. Let’s start by pulling back a bit and looking at country-wide data. If you are going to opine on national policy direction, it’s worthwhile to at least take a passing glance on the statistics at a national level, instead of comparing five French cities with five American ones. Compiled below are
I keep telling myself that the claims of tech populists about net neutrality could not get wackier, but then they go and say something that makes you realize, “yes they can.” Case in point, Alex Nogales, of the National Hispanic Media Coalition, writing this week:
“We just won a historic victory, a critical step towards equality for Latinos in the digital age. Yet many American Latinos are unaware of this win and the tremendous potential it brings for us and our families to achieve full participation in the American Dream: better educations, better jobs, more financial stability and more political power. No, unfortunately, I am not talking about important and much needed reforms to education, immigration, criminal justice, and the other major issues before us today. But this victory has far reaching implications for the way we leverage our burgeoning political power in these kind of fights in the months and years to come. So what is this beautiful, mysterious victory? On February 26, the Federal Communications Commission voted to adopt “Network Neutrality” rules.”
If Cesar Chavez were alive, I wonder what he would say. How would a man who
A new coalition of trade associations, The Coalition of Small Business Innovators, has developed two innovative tax reform proposals designed to help small research companies attract more investors, even if they are many years away from profitability. These proposals would allow passive investors to take advantage of losses and research credits generated by the company and allow companies to carry net operating losses forward even when they raise new financing. The former proposal has already been included in broader bills aimed at boosting innovation and economic activity. If enacted, the proposals could increase investment in small, research-intensive firms by $14.1 billion and create 72,000 jobs in eligible companies.
Although the U.S. financial system is the most sophisticated in the world, it still contains at least one significant gap. Small, capital-intensive companies often find it very difficult to raise the additional capital needed to go from start-up through the long development phase until they are near enough to profitability to conduct an initial public offering or be attractive to a prospective buyer. This period is commonly known as the “valley of death.” Firms in this position may have a very