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Issues in benefit-cost analysis of agricultural research projects

Author

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  • Marshall, Graham R.
  • Brennan, John P.

Abstract

Use of benefit‐cost analysis for economic comparison of agricultural research projects remains confounded, by lack of rigour in specifying the without‐project scenario and how benefits from an innovation endure after its adoption declines. Failure to account for the without‐project scenario favours projects to the extent that more benefits are foregone than costs avoided. Moreover, it is unreasonable to assume generally that aggregate benefits from an innovation continue at the peak level until the end of a 30–40 year planning horizon. A general BCA model for agricultural research projects is presented to enable flexible handling of these issues.

Suggested Citation

  • Marshall, Graham R. & Brennan, John P., 2001. "Issues in benefit-cost analysis of agricultural research projects," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(2), pages 1-19.
    • Handle: RePEc:ags:aareaj:117389
    DOI: 10.22004/ag.econ.117389
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    References listed on IDEAS

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    1. Antony, George & Anderson, Jock R., 1991. "Modelling technology replacement over time for the ex-ante analysis of agricultural research projects," Agricultural Systems, Elsevier, vol. 37(2), pages 183-192.
    2. Philip G. Pardey & Barbara Craig, 1989. "Causal Relationships between Public Sector Agricultural Research Expenditures and Output," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 9-19.
    3. John D. Mullen & Thomas L. Cox, 1995. "The Returns From Research In Australian Broadacre Agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 39(2), pages 105-128, August.
    4. Pannell, David J., 1999. "On the balance between strategic-basic and applied agricultural research," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(1), pages 1-23, March.
    5. Marshall, Graham R. & Brennan, John P., 1993. "On Benefit-Cost Evaluation of Research Projects," 1993 Conference (37th), February 9-11, 1993, Sydney, Australia 147730, Australian Agricultural and Resource Economics Society.
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    Cited by:

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    2. Silvester, Luke T. & Vere, David T., 2005. "Economic Evaluations of Production Technologies in the Australian Sheep Industry," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137948, Australian Agricultural and Resource Economics Society.
    3. Griffith, Garry R., 2009. "Estimating the economic impact of a major beef industry research and development investment," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 17, pages 1-24.
    4. Vere, David T. & Jones, Randall E. & Griffith, Garry R., 2003. "Economic benefits of public investment in weed management: the case of vulpia in south-eastern Australia’s temperate pasture areas," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 1-21.
    5. Mullen, J. D., 2002. "Farm Management In The 21st Century," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 174072, Australian Agricultural and Resource Economics Society.
    6. Mullen, J.D., 2002. "Farm Management In The 21st Century," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 10, pages 1-18, September.
    7. Wilson, Trevor & Chudleigh, Fred & Carrigan, Gretchen, 2009. "Benefit Cost Analysis of RD&E in Action," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47639, Australian Agricultural and Resource Economics Society.
    8. Heisey, Paul W. & Morris, Michael L., 2002. "Practical Challenges To Estimating The Benefits Of Agricultural R&D: The Case Of Plant Breeding Research," 2002 Annual meeting, July 28-31, Long Beach, CA 19828, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Vere, David T. & Griffith, Garry R. & Silvester, Luke T., 2005. "Australian Sheep Industry CRC: Economic Evaluations of Scientific Research Programs," Research Reports 42651, New South Wales Department of Primary Industries Research Economists.
    10. Griffith, Garry R. & Parnell, Peter F. & McKiernan, William A., 2005. "The Economic, Environmental and Social Benefits to NSW from Investment in the CRC for Beef Genetics Technologies," Research Reports 42654, New South Wales Department of Primary Industries Research Economists.
    11. Jones, Randall E. & Saunders, Glen & Balogh, Suzy, 2005. "An Economic Evaluation of a Pest Management Control Program: "Outfox the Fox"," Research Reports 42653, New South Wales Department of Primary Industries Research Economists.
    12. Morris, M. L. & Heisey, P. W., 2003. "Estimating the benefits of plant breeding research: methodological issues and practical challenges," Agricultural Economics, Blackwell, vol. 29(3), pages 241-252, December.
    13. David T. Vere & Randall E. Jones & Garry R. Griffith, 2003. "Economic benefits of public investment in weed management: the case of vulpia in south‐eastern Australia's temperate pasture areas," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 519-539, December.
    14. Farquharson, Robert J. & Morgan, J.M. & Brennan, John P., 2004. "An economic evaluation of the osmoregulation gene technology to the Australian wheat industry," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia 58446, Australian Agricultural and Resource Economics Society.

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