SOCIAL AND ECONOMIC SCIENCES $77,610,000

The FY 2003 Budget request for the Social and Economic Sciences (SES) Subactivity is $77.61 million, an increase of $9.50 million, or 13.9 percent, from the FY 2002 Current Plan of $68.11 million.

(Millions of Dollars)

The SES Subactivity supports research to develop and advance scientific knowledge focusing on economic, legal, political and social systems, organizations and institutions. SES also supports research on the intellectual and social contexts that govern the development and use of science and technology. SES includes the fields of economics; decision, risk and management sciences; political science; law and social science; sociology; ethics and values studies; science and technology studies; methodology, measurement and statistics; and cross-disciplinary activities. NSF funding provides a substantial part of total federal research support for basic research in all these fields and the major part in some of them, such as economics, political science and ethics and values studies. Fundamental new knowledge developed by NSF-supported researchers in these fields is used by many branches of the federal government as well as state and local governments and private corporations.

SES-sponsored research has had important practical results and societal benefits. SES has supported the research of George Akerlof, Michael Spence, and Joseph Stiglitz, who received the 2001 Nobel Prize in Economic Sciences for their fundamental contributions to understanding of asymmetric markets - markets in which one side has more information than the other. In markets with incomplete information, market prices and behavior convey information "signals" that affect the performance of the market. Signaling theory has been used to design and study the auctions that underpin electronic markets in the new information technology-based economy. A new generation of NSF-supported investigators continues this important line of research. CAREER award recipient Susan Athey has developed new and powerful tools for studying how information technology affects business activity under uncertainty and incomplete information. She has shown how information technology and training can reduce response times of ambulances to medical emergencies. Another CAREER award recipient, Austan Goolsbee, has used two major surveys of approximately 25,000 Internet users in late 1997 and late 1998 to examine the sensitivity of Internet commerce to tax rates. He has found that taxing Internet commerce would not yield much government revenue and would substantially set back and slow the growth of e-commerce.

SES supports shared-use databases and research platforms that deal with cyclical, intergenerational, and life-course measures of economic and social behavior. These databases and research platforms are central to the fundamental understanding of key social science issues with substantial broad impacts on society, e.g., income, poverty and wealth; demographic events (teen childbearing, marriage, divorce, living arrangements, mortality); and the cyclical behavior of wages, labor supply and consumption. Theoretical and experimental research into decision-making has produced practical societal benefits as diverse as improved medical diagnostic systems, more accurate eyewitness identification in criminal proceedings, and more effective monitoring of nuclear plants.

In FY 2003, the SES Request of $77.61 million will support a range of activities that will include:

• A total of $5.0 million for research on decision making under uncertainty in support of the Climate Change Research Initiative. This research will produce new understandings of how to manage risks associated with climate change as well as new tools, perspectives, and information that will assist individuals, groups, and organizations with the development of public policies and private-sector decisions.
  
  
• Research totaling about $3 million on terrorism and its aftermath. This research will examine a range of issues, including social groups and networks; decision-making associated with extreme events; economic consequences of sudden shocks; formation, mobilization, trajectories and consequences of social protest; social identities of immigrant, racial, and ethnic groups; and experimental studies on the formation of status beliefs, trust, and cooperation.
  
  
• Additional support for key social, economic, and demographic databases and for research on human capital. This research, which is expected to total about $12 million, will include scientific investigation of the effects of family, educational institutions, business, and community on the acquisition of skills and education. This research will contribute to the development of policies and approaches for investing in human resources.
  
  
• Fundamental research on the processes of democratization. This research, which will total about $5 million, will examine the creation and consolidation of democratic political institutions and market-oriented economies. This area will provide new insights into the political, social and economic transformations currently under way throughout the world.
  
  
• The advancement of methodological approaches across the social and behavioral sciences, which will total about $7 million. A major new research emphasis in this area will link formal theory and empirical research to specific social, behavioral, and economic issues. This research emphasis will involve cross-disciplinary work teams, conferences, educational activities, and training institutes. In addition, SES will foster active collaborations between mathematical scientists and social and behavioral scientists as part of NSF's Mathematical Sciences priority area.
  
  
• Funding for new inquiries into the sources of scientific discovery and technological innovations as well as examinations of the processes through which discovery and innovation diffuse through organizations and society. This research, which will total about $7 million, will focus on the application of new research techniques, such as Internet-based data collection, and on the socioeconomic implications of new technologies.
  
  
• Continued funding for core disciplinary and interdisciplinary fields of research in the social and economic sciences, which will total about $39 million.