The Economic Returns to U.S. Public Agricultural Research

21 Pages Posted: 8 Apr 2020

See all articles by Julian Alston

Julian Alston

University of California, Davis - Department of Agricultural and Resource Economics

Matthew Andersen

University of Wyoming

Jennifer S. James

California State Polytechnic University, San Luis Obispo

Philip Pardey

University of Minnesota - Minneapolis

Date Written: October 2011

Abstract

We use newly constructed state‐specific data to explore the implications of common modeling choices for measures of research returns. Our results indicate that state‐to‐state spillover effects are important, that the research and development lag is longer than many studies have allowed, and that misspecification can give rise to significant biases. Across states, the average of the own‐state benefit‐cost ratios is 21:1, or 32:1 when the spillover benefits to other states are included. These ratios correspond to real internal rates of return of 9% or 10% per annum, much smaller than those typically reported in the literature, partly because we have corrected for a methodological flaw in computing rates of return.

Keywords: spatial technology spillovers, knowledge stocks, R&D lags, public agricultural R&D, U.S. states

Suggested Citation

Alston, Julian and Andersen, Matthew and James, Jennifer S. and Pardey, Philip, The Economic Returns to U.S. Public Agricultural Research (October 2011). American Journal of Agricultural Economics, Vol. 93, Issue 5, pp. 1257-1277, 2011, Available at SSRN: https://ssrn.com/abstract=3571596 or http://dx.doi.org/10.1093/ajae/aar044

Julian Alston

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States

Matthew Andersen

University of Wyoming

Jennifer S. James

California State Polytechnic University, San Luis Obispo ( email )

San Luis Obispo, CA 93407
United States

Philip Pardey (Contact Author)

University of Minnesota - Minneapolis

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