Economic Evaluation of New Technologies and Promotions in the Australian Sheep and Wool Industries

Abstract

Knowledge about the size and distribution of returns from alternative broad types of R&D and promotion investments permit strategic-level decisions about resource allocation, both within and across research programs. The Australian sheep meat and wool industries are characterised by strong cross-commodity relationships due to the joint product nature of the industries. An equilibrium displacement model of the Australian sheep meat and wool industries was developed to account for these relationships and any indirect benefits and costs arising from spill-over and feedback effects between the industries as a result of research-induced innovation or promotion. The potential annual returns and their distribution among the various industry sectors were estimated from different hypothetical investment scenarios to demonstrate the model's relevance to R&D and promotion policy and decision-making.