Do Prizes in Economics Affect Productivity? A Mix of Motivation and Disappointment

Economists' productivity may evolve after an important award such as the John Bates Clark Medal or the "Nobel Prize". Yet, when establishing this stylized fact through a diff-in-diff methodology by comparing the treatment group performance of award winners with the one of the control group made of other contenders, one should take into account the fact that these may also alter their productivity due to disappointment. To challenge this hypothesis, using the John Bates Clark Medal as the event likely to impact economists' productivity, two different methods are used. The first one uses a standard diff-in-diff approach, with a treatment group made of American economists of high enough standard, using as a criterion the belonging to the American Econometrics Association, and a control group made of non-American economists of comparable standard, not fulfilling the criteria (being American, or at least established in the US) to be in a position to hope for this reward. This first approach gives mixed results. The second approach sets an innovative method to build a new treatment and control group. This latest method may be called iterative diff-in-diff: it consists in selecting, into the initial sample for the treatment group, the members of the sample who fit most the expected result, in the case of the present article, the decrease of their productivity. When comparing this sub-sample with the rest of the initial treatment sample, one tries to find a criterion, in line with the initial question raised (in the present case, the fact of attributing a high value to honors, proxied by the position of the honors section in their CV), which differentiates the two sub-samples. With this second method of iterative diff-in-diff, we find that economist who pay most attention to awards increase their productivity before the 40 year threshold of the John Bates Clark Medals and use this increased investment to keep a high productivity for a few years after the age of 40, before registering a sizeable decrease.