Economic Returns to Public Agricultural Research

This paper examines three claims of inefficient allocation of public expenditure in publicly funded agricultural research in the United States. It has been argued by analysts of research policy that: 1. The overall level of public investment in agricultural research is less than what would be socially optimal. 2. The present composition of public research investment is excessively myopic in that too little basic research is performed relative to the level of applied research. 3. The allocation of research resources among commodities is inconsistent with economic efficiency. A non-linear optimal growth model of the U.S. economy was employed to test these propositions. Strong support was found for the claim that the overall level of investment has been inadequate. No support was found for the contention that basic research has been relatively underfunded compared to applied research. Weak support was found for the view that crop research has suffered from more acute underfunding than has livestock research.

Journal of Policy Modeling, 1999

ABSTRACT This study examines the returns to U.S. agricultural research investments for the years 1930 through 1990 using a cointegration model. Time series data on agricultural productivity, public and private research investments, farmers’ education, terms of trade, and commodity programs were found to be nonstationary and cointegrated. The estimated internal rates of return are 27 percent for public research and 6 percent for private research. These estimates from the most comprehensive and timely data assembled to date indicate that returns to public agricultural research compare favorably to real returns on alternative long-run investments, but do not call for large increases in investments suggested by previous studies or for the drop in public research expenditures appropriated by the U.S. Congress in recent years.

Journal of Productivity Analysis, 2012

The internal rate of return (IRR) to public investment in agricultural R&D is estimated for each of the continental U.S. states. Theoretically, our contribution provides a way of obtaining the returns to a local public good using Rothbart's concept of virtual prices. Empirically, we use the spatial dependency among states generated by knowledge spillovers to define the 'appropriate' jurisdiction. We estimate an average own-state rate of 17% and a social rate of 29%. These figures should inform the policy debate on the allocation of federal funds to research in the actual food crisis environment.

2012

Evaluation of publicly funded research can help provide accountability and prioritize programs. In addition, Federal intramural research planning generally involves an institutional assessment of the appropriate Federal role, if any, and whether the research should be left to others, such as universities or the private sector. Many methods of evaluation are available, peer review—used primarily for establishing scientific merit—being the most common. Economic analysis focuses on quantifying ultimate research outcomes, whether measured in goods with market prices or in nonmarket goods such as environmental quality or human health. However, standard economic techniques may not be amenable for evaluating some important public research priorities or for institutional assessments. This report reviews quantitative methods and applies qualitative economic reasoning and stakeholder interviewing methods to the evaluation of economic benefits of Federal intramural research using three case st...

1999

This study examines the returns to U.S. agricultural research investments for the years 1930 through 1990 using a cointegration model. Time series data on agricultural productivity, public and private research investments, farmers’ education, terms of trade, and commodity programs were found to be nonstationary and cointegrated. The estimated internal rates of return are 27 percent for public research and 6 percent for private research. These estimates from the most comprehensive and timely data assembled to date indicate that returns to public agricultural research compare favorably to real returns on alternative long-run investments, but do not call for large increases in investments suggested by previous studies or for the drop in public research expenditures appropriated by the U.S. Congress in recent years.

2000

In recent years a considerable literature has been published about returns to research in agriculture. This report does not attempt to add to the literature with new data or analyses. Our purpose is to summarize what has been learned for a broad reader audience. This report is organized by concepts, such as what agricultural research is, the costs and benefits of research, comparisons between public and private research, the returns to agricultural research investments, and gains in productivity due to research. We drew from available literature as much as possible to make each section complete. Sometimes, that meant that we could not compare information all from the same year or that we had to compare everything in the year of the oldest study, since different types of studies came out in different years.

Journal of Agricultural and Applied Economics, 2017

This article reviews the current debate on whether U.S. agricultural productivity growth is slowing. It also assesses recent research on how productivity is related to long-term investment in research and development (R&D). It describes significant changes taking place in the U.S. agricultural research system, including the growing role of private agribusiness as a main developer of new agricultural technologies and what this implies for agricultural science policy. The conclusion has suggestions for future research on these issues.

1994