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Rates of return to public agricultural research in 48 US states

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  • Alejandro Plastina
  • Lilyan Fulginiti

Abstract

The present study provides a quantitative assessment of the benefits from public agricultural research and development (R&D) for each continental state of the U.S. for 1949-1991, explicitly acknowledging for spillover effects. The novelty of this study resides in the use of spatial econometric techniques to account for stochastic spatial dependency generated by knowledge spillovers. The estimated national average own state internal rate of return (IRR) to investments in public agricultural R&D is 15.69%; while the estimated national average social IRR is 27%. Failing to account for the indirect effects of knowledge spillovers results in estimates that are, on average, 11% and 13% higher.
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  • Alejandro Plastina & Lilyan Fulginiti, 2012. "Rates of return to public agricultural research in 48 US states," Journal of Productivity Analysis, Springer, vol. 37(2), pages 95-113, April.
  • Handle: RePEc:kap:jproda:v:37:y:2012:i:2:p:95-113
    DOI: 10.1007/s11123-011-0252-0
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    Cited by:

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    2. Sabasi, Darlington & Shumway, C. Richard, 2014. "Technical Change, Efficiency, and Total Factor Productivity in U.S. Agriculture," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170225, Agricultural and Applied Economics Association.
    3. Jin, Yu & Huffman, Wallace E., 2013. "Reduced U.S. funding of public agricultural research and extension risks lowering future agricultural productivity growth prospects," ISU General Staff Papers 201312180800001053, Iowa State University, Department of Economics.
    4. Rao, Xudong & Hurley, Terrance M. & Pardey, Philip G., 2019. "Are agricultural R&D returns declining and development dependent?," World Development, Elsevier, vol. 122(C), pages 27-37.
    5. Eric Njuki & Boris E Bravo-Ureta & Christopher J O’Donnell, 2018. "A new look at the decomposition of agricultural productivity growth incorporating weather effects," PLOS ONE, Public Library of Science, vol. 13(2), pages 1-21, February.
    6. Pavel Trunin & Marina Kamenskikh & Margarita Muftiahetdinova, 2009. "Islamic Banking System: Present State and Prospects for Development," Research Paper Series, Gaidar Institute for Economic Policy, issue 122P.
    7. Wang, Sun Ling & Ball, V. Eldon & Fulginiti, Lilyan E. & Plastina, Alejandro S., 2012. "Benefits of Public R&D in U.S. Agriculture: Spill-Ins, Extension, and Roads," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126368, International Association of Agricultural Economists.
    8. Yu Jin & Wallace E. Huffman, 2016. "Measuring public agricultural research and extension and estimating their impacts on agricultural productivity: new insights from U.S. evidence," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 15-31, January.
    9. Eric Njuki & Boris E. Bravo-Ureta & Christopher J. O’Donnell, 2019. "Decomposing agricultural productivity growth using a random-parameters stochastic production frontier," Empirical Economics, Springer, vol. 57(3), pages 839-860, September.
    10. Kingwell, Ross, 2018. "The Rationale for Taxpayer Support for Primary Industry Research and Innovation in Western Australia," Working Papers 274837, University of Western Australia, School of Agricultural and Resource Economics.
    11. Wang, Sun Ling & Heisey, Paul & Schimmelpfennig, David & Ball, Eldon, 2015. "Agricultural Productivity Growth in the United States: Measurement, Trends, and Drivers," Economic Research Report 207954, United States Department of Agriculture, Economic Research Service.
    12. Hurley, Terrance M. & Pardey, Philip G. & Rao, Xudong & Andrade, Robert S., 2016. "Returns to Food and Agricultural R&D Investments Worldwide, 1958-2015," Briefs 249356, University of Minnesota, International Science and Technology Practice and Policy.
    13. Fukuyama, Hirofumi & Weber, William L. & Xia, Yin, 2016. "Time substitution and network effects with an application to nanobiotechnology policy for US universities," Omega, Elsevier, vol. 60(C), pages 34-44.

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    More about this item

    Keywords

    Internal rates of return; Public R&D; Spillins; Spillovers; Local public goods; Appropriate jurisdiction; Spatial; Q16; H41; C33; C31;
    All these keywords.

    JEL classification:

    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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