12 



Agricultural Research and Productivity 



that of Griliches (1958), who studied the economics of the hybrid 

 corn innovation in the United States. The development of hy- 

 bridization methods, and ihe/iew varieties released as a result, in- 

 creased the supply of the crop. The benefits of this process were 

 estimated by Griliches as the additional "surpluses" (consumers' 

 and producers') associated with these innovations. The costs were 

 the accumulated research expenditures on hybrid corn projects. 

 Griliches estimated the internal rate of return associated with the 

 hybrid corn program to be 35-40 percent. 



Table 1.3: Selected Estimates of the Economic Contribution 

 of Agricultural Research 



Study 



Griliches (1958) 

 Peterson (1967) 

 Ayer(1970) 

 Evenson (1971) 

 Tang (1963) 

 ArditoBarletta(1970) 



Following Griliches, several other estimates of the returns to 

 research were prepared; some are reported in table 1.3. All of the 

 studies surveyed reported higher returns to investment in 

 research than the returns realized on other public investment 

 projects.^ 



Griliches's hybrid corn study also cast light on the economics 

 of the diffusion of the innovation. He showed that both the 

 geographical distribution of research efforts and rates of adoption 

 of the new varieties were affected by economic considerations. 

 Similarly, but in a different context, Hayami and Ruttan (1971) 

 argued, in comparing the agricultural developments of the United 

 States and Japan, that the directions of the research and the 

 choice of technologies by farmers were induced by factor prices. 

 They showed that public agencies are motivated, at least to a 



5. In addition to the studies reported in table 1.3, the following could be men- 

 tioned: Griliches (1964), Latimer and Paarlberg (1965), and Hines (1972). 



