Do Expert Panelists Herd? Evidence from FDA Committees

54 Pages Posted: 28 Oct 2019

See all articles by Melissa Newham

Melissa Newham

KU Leuven; German Institute for Economic Research (DIW Berlin)

Rune Midjord

Copenhagen Business School

Date Written: October 2019

Abstract

We develop a structural model to address the question whether, and to what extent, expert panelists engage in herd behavior when voting on important policy questions. Our data comes from FDA advisory committees voting on questions concerning the approval of new drug applications. We utilize a change in the voting procedure from sequential to simultaneous voting to identify herding. Estimates suggest that around half of the panelists are willing to vote against their private assessment if votes from previous experts indicate otherwise and, on average, 9 percent of the sequential votes are actual herd-votes. Temporary committee members are more prone to herding than regular (standing) members. We find that simultaneous voting improves information aggregation given our estimates.

Keywords: herd behavior, expert committees, structural estimation, FDA, public health

JEL Classification: D72, D82, D83, D91, I10, I18

Suggested Citation

Newham, Melissa and Midjord, Rune, Do Expert Panelists Herd? Evidence from FDA Committees (October 2019). DIW Berlin Discussion Paper No. 1825 (2019). Available at SSRN: https://ssrn.com/abstract=3476536 or http://dx.doi.org/10.2139/ssrn.3476536

Melissa Newham (Contact Author)

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Rune Midjord

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

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