 The Calculation of Returns to Research in Distorted MarketsJames F. Oehmke Agricultural Economics, 1988, vol. 2, issue 4, 291-302 Abstract: Most of the empirical literature calculating rates of return to publicly sponsored research assumes that research is the only relevant government intervention. For most countries this assumption is untenable. This paper shows that improperly measuring government induced market distortions can severely bias research rate of return calculations. If the interaction between successful research and other government interventions increases the cost of the other interventions, then neglecting market distortions unambigously increases the calculated rate of return. Three examples of government induced distortions show that the magnitude of the upward bias in calculated rates of return can be extremely large ‐ in some cases more than 100 percentage points. A normative implication is that governments should account for interactions between research and price interventions when determining research support levels. A positive implication is that existing government research funding patterns are more readily explainable as reasonable behavior by a government that accounts for these interactions. Date: 1988 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:agecon:v:2:y:1988:i:4:p:291-302 Ordering information: This journal article can be ordered from Access Statistics for this article Agricultural Economics is currently edited by W.A. Masters and G.E. Shively More articles in Agricultural Economics from International Association of Agricultural Economists Contact information at EDIRC. |
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