Rates of return to public agricultural research in 48 US states

Alejandro Plastina, Lilyan Fulginiti

Research output: Contribution to journalArticlepeer-review

20 Scopus citations

Abstract

The internal rate of return to public investment in agricultural R&D is estimated for each of the continental US states. Theoretically, our contribution provides a way of obtaining the returns to a local public good using Rothbart's concept of virtual prices. Empirically, a stochastic cost function that includes own knowledge capital stock as well as spillover capital stock variables is estimated. Stochastic spatial dependency among states generated by knowledge spillovers is used to define the 'appropriate' jurisdictions. We estimate an average own-state rate of 17% and a social rate of 29% that compare well to the 9 and 12% average returns of the S&P500 and NASDAQ composite indexes during the same period.

Original languageEnglish (US)
Pages (from-to)95-113
Number of pages19
JournalJournal of Productivity Analysis
Volume37
Issue number2
DOIs
StatePublished - Apr 2012

Keywords

  • Appropriate jurisdiction
  • Internal rates of return
  • Local public goods
  • Public R&D
  • Spatial
  • Spillins
  • Spillovers

ASJC Scopus subject areas

  • Business and International Management
  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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