Exploring the Unknown - NASA's History Office

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contains a larger random component than γ C , but the coefficient of the term for NASA
R&D spending is similar for these regressions. Even the “least favorable” case does not
change the general conclusions of the study concerning either the rate of return or the
economic impact of changes in NASA R&D spending.
Document III-5
Document title: Robert D. Shriner, Director of Washington Operations, Chase
Econometrics, to Henry Hertzfeld, NASA, April 15, 1980.
Source: NASA Historical Reference Collection, NASA History Office, NASA
Headquarters, Washington, D.C.
In 1980, NASA commissioned Chase Econometrics to redo its 1976 study (Document III-4), this time
taking into account changes in the overall business cycle and possible statistical errors that might have
accounted for the results of the earlier study. In the 1980 analysis, Chase found that the percentage
of overall R&D for which NASA accounted was so small that the quantitative results that showed the
benefits from NASA R&D were statistically insignificant. The study did not conclude that benefits
did not occur, only that this type of economic tool was not capable of precise measurement, given the
quality of the data available. This is the letter that accompanied the 1980 report, “The Economic
Impact of NASA R&D Spending, an Update,” by Chase’s David M. Cross under Contract No.
NASW-3345, dated March 1980.
Dr. Henry Hertzfeld
National Aeronautics and Space Administration
Room 6133, FOB#6
400 Maryland Avenue, S.W.
Washington, D.C. 20546
Dear Henry:
SPACE AS AN INVESTMENT IN ECONOMIC GROWTH
April 15, 1980
Chase Econometrics is pleased to transmit herewith 10 copies of the final report of
our efforts under Contract NASW-3345 to update the 1976 study of the economic impact
of NASA R&D spending.
As you are aware, major technical problems were encountered in the course of the
study which ultimately led to the decision to abandon an attempt to prepare a 10-year
macro simulation because the estimates of several variables developed in preliminary work
were judged unstable and unreliable. The problems encountered in trying to replicate the
prior study with an expanded time series calls into serious question the soundness of
results obtainable from this sort of “macro” level approach to the estimation of returns to
NASA R&D expenditures. While it is possible that some of these difficulties could be overcome
if more time and effort were devoted to the task, there are conceptual simplifications
implicit in the aggregate approach that will not disappear with more work. We have
noted these in our report.
Our experience and that of other investigators in this general area suggests that further
attention should be focused in the future on the examination of effects at a more
micro level. Industry case studies (for which much data already exists) and interindustry
studies would be mutually complementary and should provide significant new insights.