"Expertise vs. Bias in Evaluation: Evidence from the NIH"

Evaluators with expertise in a particular field may have an informational advantage in separating good projects from bad. At the same time, they may also have personal preferences that impact their objectivity. This paper develops a framework for separately identifying the effects of expertise and bias on decision making and applies it in the context of peer review at the National Institutes of Health (NIH). I find evidence that evaluators are both biased in favor of and better informed about projects in their own area. On net, the benefits of expertise tend to dominate the costs of bias; limiting the influence of personal preferences may also reduce the quality of funding decisions.