Persistence Pays

by Alston, Julian M.; Andersen, Matthew A.; James, Jennifer S.; Pardey, Philip G.

• ISBN13: 9781441906571
• ISBN10: 1441906576
• Format: Hardcover
• Copyright: 2009-08-01
• Publisher: Springer Verlag

Summary

This study presents entirely new econometric evidence on the links between public investments in agricultural R&D and agricultural productivity using state-specific data on U.S. agricultural productivity, and federal and state government investments in agricultural research and extension. Particular attention is paid to the specification of the research lag structure and interstate spillovers and the implications for the estimated returns to research. Using newly constructed sets of panel data, some of which span the twentieth century, the results indicate that the lags linking R&D spending to productivity growth are substantially longer than commonly found or assumed in the prior published work.The spillover effects of R&D among states are also especially important, such that the national social net benefits form a state's agricultural research investments are much greater than the state's own net benefits. Specific results are sensitive to unavoidable model specification choices, but the main findings are consistent across all of the models, indicating that the benefits from past public investments in agricultural research have been worth many times more than the costs, that a significant share of the benefits accrue as spillovers, and that the research lags are very long. The evidence is also indicative of a substantial misallocation of public funds to U.S. agricultural R&D. Clearly the total investment has been too little, and the results also suggest that a reallocation of funding among states might raise the national return to investments in agricultural R&D.

Author Biography

Julian M. Alston is Professor in the Department of Agricultural and Resource Economics and Director of the Robert Mondavi Institute Center for Wine Economics at the University of California, Davis and Associate Director for Science and Technology at the University of California Agriculture Issues Center. Matthew A. Anderson is Assistant Professor in the Department of Agricultural and Applied Economics at the University of Wyoming. Jennifer S. James is Associate Professor in the Department of AgriBusiness at California Polytechnic State University San Luis Obispo. Philip G. Pardey is Professor in the Department of Applied Economics and Director of the International Science and Technology Practice and Policy (InSTePP) Center at the University of Minnesota.

Table of Contents

Foreword	p. ix
Acknowledgments	p. xiii
List of Tables	p. xxi
List of Figures	p. xxvii
List of Boxes	p. xxxi
Context	p. 1
Introduction	p. 3
A Brief History of U.S. Agriculture	p. 9
Trends in Agricultural Output	p. 9
Farms and Farmers	p. 16
Conclusion	p. 21
Inputs, Outputs And Productivity	p. 23
Agricultural Inputs	p. 25
Overview	p. 25
The Composition of Capital	p. 33
The Composition of Labor	p. 39
The Composition of Land	p. 44
Other Inputs	p. 46
Factor Proportions, Relative Prices and Cost Shares	p. 50
Conclusion	p. 54
Agricultural Outputs	p. 57
Value, Composition and Location of Production	p. 57
Indexes of the Quantity and Price of Output	p. 69
Conclusion	p. 74
Agricultural Productivity Patterns	p. 87
Partial Factor Productivity Measures	p. 88
Multi-Factor Productivity Measures	p. 100
A Systematic Slowdown in Productivity Growth?	p. 110
Conclusion	p. 120
The InSTePP Production Accounts	p. 127
Agricultural R&D Funding And Policies	p. 135
Research Funding and Performance	p. 137
Overall Spending on the Sciences	p. 137
Global Agricultural R&D Spending	p. 143
U.S. Public and Private Agricultural Research	p. 147
Trends in U.S. Public Agricultural Research and Extension Spending	p. 151
Intensity of Investment	p. 161
Sources and Forms of Funding	p. 171
Conclusion	p. 175
The Federal Role	p. 187
Enhanced Incentives to Innovate	p. 188
Organized Agricultural Research and Extension	p. 193
Forms of Federal Funding	p. 198
Conclusion	p. 210
U.S. Public Agricultural Research and Extension Series	p. 229
State Agricultural Experiment Stations (SAESs)	p. 229
RPA (Research Problem Area) and Commodity Focus	p. 234
Intramural USDA Research	p. 234
Extension Expenditures	p. 235
Research Deflator	p. 236
Models Of R&D And Productivity	p. 237
Research Lags and Spillovers	p. 239
R&D Lags in Econometric Models	p. 240
Stylized Facts about R&D Lags in Agriculture	p. 244
Evidence on Research-Innovation-Adoption Lags	p. 248
Spatial Aspects of the R&D Attribution Problem	p. 259
Conclusion	p. 262
Models of Industrial R&D	p. 265
Models of Research and Productivity	p. 271
Modeling Productivity and Knowledge Stocks	p. 271
Specification of R&D Lag Distributions	p. 275
Spillover Coefficients and Knowledge Stocks	p. 284
More About Extension Knowledge Stocks	p. 297
Weather	p. 300
Conclusion	p. 302
Econometric Estimation and Results	p. 313
Estimation Procedure	p. 313
Base Model Estimates	p. 317
Sensitivity of Results to Model Variations	p. 328
Interpretation and Assessment	p. 345
Productivity Patterns and Research Benefits	p. 353
Growth Accounting	p. 354
Analysis of State and National Benefits and Costs	p. 366
Prospective Productivity Patterns	p. 385
Interpretation And Synthesis	p. 409
Interpretation and Assessment of Benefit-Cost Findings	p. 411
Summary of Main Findings	p. 412
Determinants of Benefits	p. 416
Plausibility of Estimates-Various Perspectives	p. 423
Synthesis	p. 453
Factology	p. 454
A Systematic Slowdown?	p. 457
Attribution	p. 457
Research Returns	p. 460
Prospects	p. 462
References	p. 465
Index	p. 493
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