Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches?
Zvi Griliches’ seminal analysis of hybrid corn spawned a large literature seeking to quantify and demonstrate the value of agricultural research and development (R&D) investments. The most important metric for quantifying the rate of return to R&D emerging from this literature is the internal rate o...
| Autores principales: | , , |
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| Formato: | Journal Article |
| Lenguaje: | Inglés |
| Publicado: |
Wiley
2020
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/119455 |
| _version_ | 1855536981768929280 |
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| author | Rao, Xudong Hurley, Terrance Pardey, Philip G. |
| author_browse | Hurley, Terrance Pardey, Philip G. Rao, Xudong |
| author_facet | Rao, Xudong Hurley, Terrance Pardey, Philip G. |
| author_sort | Rao, Xudong |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Zvi Griliches’ seminal analysis of hybrid corn spawned a large literature seeking to quantify and demonstrate the value of agricultural research and development (R&D) investments. The most important metric for quantifying the rate of return to R&D emerging from this literature is the internal rate of return (IRR), even though Griliches was sceptical of its usefulness as a metric in this context. An alternative metric, also reported by Griliches but not as commonly used in the subsequent returns-to-research literature, is the benefit–cost ratio (BCR). We assess how the implications of the returns to agricultural R&D literature may have differed if the BCR had become the standard rather than the IRR. We reveal that the IRR and BCR produce substantially different rankings of agricultural R&D projects, differences that persist even under various commodity and geographical aggregations of the BCR and IRR estimates. The median across 2,627 reported IRRs is 37.5 per cent per year. Using data gleaned from 492 research evaluation studies, we developed and deployed a methodology to impute 2,126 BCRs (median of 5.4) and modified internal rates of returns (MIRRs, median of 16.4 per cent per year) assuming a uniform 10 per cent per year discount rate and a 30 year research timeline. |
| format | Journal Article |
| id | CGSpace119455 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2020 |
| publishDateRange | 2020 |
| publishDateSort | 2020 |
| publisher | Wiley |
| publisherStr | Wiley |
| record_format | dspace |
| spelling | CGSpace1194552025-11-05T12:29:49Z Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches? Rao, Xudong Hurley, Terrance Pardey, Philip G. agricultural research for development returns impact assessment benefit-cost ratio investigación agrícola para el desarrollo retornos evaluación del impacto Zvi Griliches’ seminal analysis of hybrid corn spawned a large literature seeking to quantify and demonstrate the value of agricultural research and development (R&D) investments. The most important metric for quantifying the rate of return to R&D emerging from this literature is the internal rate of return (IRR), even though Griliches was sceptical of its usefulness as a metric in this context. An alternative metric, also reported by Griliches but not as commonly used in the subsequent returns-to-research literature, is the benefit–cost ratio (BCR). We assess how the implications of the returns to agricultural R&D literature may have differed if the BCR had become the standard rather than the IRR. We reveal that the IRR and BCR produce substantially different rankings of agricultural R&D projects, differences that persist even under various commodity and geographical aggregations of the BCR and IRR estimates. The median across 2,627 reported IRRs is 37.5 per cent per year. Using data gleaned from 492 research evaluation studies, we developed and deployed a methodology to impute 2,126 BCRs (median of 5.4) and modified internal rates of returns (MIRRs, median of 16.4 per cent per year) assuming a uniform 10 per cent per year discount rate and a 30 year research timeline. 2020-07 2022-05-04T09:09:14Z 2022-05-04T09:09:14Z Journal Article https://hdl.handle.net/10568/119455 en Open Access application/pdf Wiley Rao, X.; Hurley, T.; Pardey, P. (2020) Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches? Australian Journal of Agricultural Resource Economics 64(3) p. 977-1001. ISSN: 1364-985X |
| spellingShingle | agricultural research for development returns impact assessment benefit-cost ratio investigación agrícola para el desarrollo retornos evaluación del impacto Rao, Xudong Hurley, Terrance Pardey, Philip G. Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches? |
| title | Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches? |
| title_full | Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches? |
| title_fullStr | Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches? |
| title_full_unstemmed | Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches? |
| title_short | Recalibrating the reported returns to agricultural R&D: what if we all heeded Griliches? |
| title_sort | recalibrating the reported returns to agricultural r d what if we all heeded griliches |
| topic | agricultural research for development returns impact assessment benefit-cost ratio investigación agrícola para el desarrollo retornos evaluación del impacto |
| url | https://hdl.handle.net/10568/119455 |
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