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What is the Human Genome Worth?

Economists sceptical over study's estimate of massive financial return.

By Nadia Drake of Nature magazine

A high-profile claim that the Human Genome Project and associated research generated almost US$800 billion in economic benefits has been questioned by economists.

The estimate comes from the Battelle Memorial Institute, headquartered in Columbus, Ohio. A team of researchers used an 'input-output' economic model to calculate a 141-fold return on each dollar invested in the Human Genome Project. The team's report concludes that a $3.8-billion federal investment (equivalent to $5.6 billion in 2010 dollars) produced $796 billion in economic output between 1988 and 2010 and, in 2010 alone, supported 310,000 jobs.

Critics of the report say that the methods used to calculate these numbers, despite being common practice in such studies, are flawed. For example, some of the costs of the project--such as the salaries of those working on it--are counted as benefits.

"What they did is conventional and reasonably done, for what it is," says economist Bruce Weinberg at Ohio State University in Columbus. "But at a deeper conceptual level, it's not very consistent with economic logic. All those guys who wound up sequencing the genome? Those aren't the benefits, those are the costs of sequencing the genome."

But the Battelle team stands by its analysis, as does the Life Technologies Foundation, the company that sponsored the report. "The numbers are big, but when you dig into it, the methodology is actually pretty conservative," says Greg Lucier, chief executive of Life Technologies. He says that the company commissioned the report because "we didn't really know how much value was created so far, or how broad the impact was".

The big picture

Report co-author Martin Grueber, research leader for Battelle in Cleveland, Ohio, says that the criticized input-output model is the best way to try to "get a big-picture sense" of the research done by the Human Genome Project.

Admittedly, that is not an easy task, says science-policy analyst Barry Bozeman at the University of Georgia in Athens. "Coming up with a valid number for the impacts of investments in programs that are extremely complex with extremely diffuse impacts--it's really, really daunting," he says.

Efforts to quantify the economic value of research have become commonplace. A study was released today by United for Medical Research, a coalition of research organizations, on the benefits that funding for the National Institutes of Health has provided to the economy and medical research, for example. And, last year, the Obama administration launched the STAR METRICS program to track the effects of federal research funding on employment, publications and other measures of productivity (see Let's make science metrics more scientific).

But some economists have argued that such analyses are problematic because the studies are rarely objective, economic outputs are tricky to quantify, and the costs and benefits are murky (see What science is really worth).

Ripple effect

The Battelle study gathered longitudinal data, beginning in 1988, about federal funding for the Human Genome Project and factored in funds for related projects. The authors then looked at how that money rippled through the economy, producing growth in industry and academia. The analysis concluded that initial investments returned $244 billion in personal income to employees and created 3.8 million job-years of employment. "There will be benefits for years and decades to come," says Grueber.

None of the report's critics dispute the genome project's importance. "The value of the Human Genome Project is unquestionable," says Weinberg. "But, at this point, it's hard to say what the dollar value is." The actual benefits--for health care or the environment, for example--are likely to be staggering, although much harder to measure. "This method produces that satisfying number, but it's not clear that you're measuring the right thing," says Weinberg.

Grueber says he's aware of such criticisms, but wanted to focus on how the project ultimately affected the creation of additional research, jobs and industrial productivity. "There's always the issues of revenues coming from the public, opportunity costs, those dollars could have been reduced taxes," he says. "We weren't getting engaged in that discussion."

Bozeman adds that these types of study are often hard to replicate. But, he says, although such results are less persuasive for academics, they are reassuring to policy-makers who like tangible numbers. "People who are already advocating expansion of these kinds of programs will find it a useful tool," Bozeman says of the report's likely impact. "Having some kind of evidence is helpful, even if it's not entirely persuasive."

This article is reproduced with permission from the magazine Nature. The article was first published on May 11, 2011.

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