The Rate of Return to Agricultural Research in a Small Country: The Case of Beef Cattle Research in Canada

Abstract

The net economic benefits of Canadian federal beef cattle research programs were estimated using the economic surplus approach. The internal rate of return to research expenditure from 1968 to 1984 was found to be 63% at the margin, indicating substantia] underinvestment in technological change. Rates of return indicative of underinvestment were found even when an adjustment was made to research costs to reflect the marginal excess burden of taxation. Most of the benefits of beef cattle research conducted during this time period accrued to Canadian beef producers. Les bénéfices économiques nets des programmes de recherche fédéraux Canadiens sur le boeuf sont estimés en utilisant ľapproche du surplus économique. Le taux interne de rendement des défenses de recherche effectuées de 1968 à 1984 est établi à 63%, indiquant un sous‐investissement substantiel dans le changement technologique. Même en incluant la perte de bien‐être due à ľimposition ďune taxe, ľétude montre un sous‐investissement dans la recherche. La plupart des bénéfices de la recherche sur le boeuf effectuée durant cette période ont profité aux producteurs agricoles.

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