Abstract
This paper uses panel data for the 1980-2004 period to estimate the contributions of public research to US agricultural productivity growth. Local and social internal rates of return are estimated accounting for the effects of R & D spill-in, extension activities and road density. R & D spill-in proxies were constructed based on both geographic proximity and production profile to examine the sensitivity of the rates of return to these alternatives. We find that extension activities, road density, and R & D spill-ins, play an important role in enhancing the benefit of public R & D investments. We also find that the local internal rates of return, although high, have declined through time along with investments in extension, while the social rates have not. Yet, the social rates of return are not robust to the choice of spill-in proxy.
Highlights
Since the pioneering work by Griliches [1] [2] and Evenson [3], several empirical studies have shown that public investment in agricultural research and development (R & D) is a primary driver of productivity growth
We find that extension activities, road density, and R & D spill-ins, play an important role in enhancing the benefit of public R & D investments
The estimates are all significant at 1% level except when we proxy spill-ins using geographic distance (Model 2.) We find that an increase in extension activities, road density, Table 4
Summary
Since the pioneering work by Griliches [1] [2] and Evenson [3], several empirical studies have shown that public investment in agricultural research and development (R & D) is a primary driver of productivity growth. Alston et al [4] found that the median of the estimated rate of return to agricultural research was 48 percent per year. Huffman and Evenson [5] reviewed studies of the US agricultural sector covering the 1965-2005 period and found that, on average, the social rate of return was more than 50 percent per annum. Fuglie and Heisey [6] reviewed studies on Federal-State investment in agricultural research. They reported that the rates of return are in range of 20 to 60 percent for most studies
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
