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Economic Approaches To the Evaluation of Research

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  • Harvey A. Averch

    (Florida International University)

Abstract

This article reviews the principal methods economists and benefitlcost analysts use in evaluating research. These methods usually involve computing impacts using market information, mone tizing the impacts, and then comparing the value of the impacts with the cost of research. Two principal measures are common in the literature: surplus measures (consumers' surplus, producers'surplus, and combinations thereof) and productivity measures (average or marginal contributions of research and development [R&D] at firm, industry, national, or international levels). Given known time streams of benefits and costs, internal rates of return to R&D investments are then computed The article notes both the standard technical difficulties with these approaches and the political and organizational difficulties in using them.

Suggested Citation

  • Harvey A. Averch, 1994. "Economic Approaches To the Evaluation of Research," Evaluation Review, , vol. 18(1), pages 77-88, February.
    • Handle: RePEc:sae:evarev:v:18:y:1994:i:1:p:77-88
    DOI: 10.1177/0193841X9401800108
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    References listed on IDEAS

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    1. Davis, Jeffrey S., 1981. "The Relationship Between the Economic Surplus and Production Function Approaches for Estimating Ex-Post Returns to Agricultural Research," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 49(02), pages 1-11, August.
    2. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45, National Bureau of Economic Research, Inc.
    3. Mansfield, Edwin, 1980. "Basic Research and Productivity Increase in Manufacturing," American Economic Review, American Economic Association, vol. 70(5), pages 863-873, December.
    4. Edwin Mansfield & John Rapoport & Anthony Romeo & Samuel Wagner & George Beardsley, 1977. "Social and Private Rates of Return from Industrial Innovations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 221-240.
    5. Scherer, F. M., 1982. "Inter-industry technology flows in the United States," Research Policy, Elsevier, vol. 11(4), pages 227-245, August.
    6. Lichtenberg, Frank R & Siegel, Donald, 1991. "The Impact of R&D Investment on Productivity--New Evidence Using Linked R&D-LRD Data," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 203-229, April.
    7. Graves, Philip E & Marchand, James R & Thompson, Randal, 1982. "Economics Departmental Rankings: Research Incentives, Constraints, and Efficiency," American Economic Review, American Economic Association, vol. 72(5), pages 1131-1141, December.
    8. Jan P. Voon & Geoff W. Edwards, 1991. "The Calculation of Research Benefits with Linear and Nonlinear Specifications of Demand and Supply Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 415-420.
    9. Nadiri, M Ishaq, 1970. "Some Approaches to the Theory and Measurement of Total Factor Productivity: A Survey," Journal of Economic Literature, American Economic Association, vol. 8(4), pages 1137-1177, December.
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    Cited by:

    1. Lee, Mushin & Son, Byoungho & Om, Kiyong, 1996. "Evaluation of national R&D projects in Korea," Research Policy, Elsevier, vol. 25(5), pages 805-818, August.

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