The Economic Returns to U.S. Public Agricultural Research

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 R&D 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 percent 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.

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Replaced with revised version of paper 07/22/11. Former Title: Revisiting the Returns to U.S. Public Agricultural Research: New Measures, Models, Results, and Interpretation
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Staff Paper P10-8, Revised July 2011
InSTePP Paper 10-04, Revised July 2011

 Record created 2017-04-01, last modified 2020-10-28

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