Returns to Policy-Related Social Science Research in Agriculture

Policy research is valuable as a source of information for decisionmakers. The value of research is the expected social gain from policy decisions influenced by the information generated. The gain from a decision depends on choosing the best policy given the state of the world, which is uncertain. The output of policy research is a conclusion about that state. Taking a Bayesian approach, the ex ante value of a research program is estimated from information about decisionmakers’ prior probabilities of the state of the world and the likelihood of correct and incorrect research findings.

Case studies of U.S. agricultural policy research cover consequences of trade liberalization, farm commodity program analysis, effects of publicly supported commodity promotion, and the value of publicly funded crop forecasting and research on agricultural technology. The quantification of the value of these research programs is highly conjectural, but consideration of their likely magnitude, as compared to the costs of the research, suggests that there are substantial net social gains.

The case studies of agricultural policy research considered in this paper suggest that there are substantial net gains to the ongoing policy research agenda. However, the quantification of these gains is highly conjectural and narrowly focused on agricultural economics in the United States. Nonetheless, the conceptual framework and empirical evidence given provide reasonable grounds to believe that policy-related research has generated benefits that more than cover the costs. One line of skepticism about this conclusion as a justification for maintaining or increasing public support for social science research is that even if the arguments of this paper are accepted in the aggregate, policy-related social science research in agriculture could be managed more efficiently. Many policy-related studies and publications, even the entire output of some researchers, could have been omitted without loss. So only a part, and perhaps even a small part, of the research need have been funded. With better management, less policy research can be funded in the future without a loss of expected future net benefits. The flaw in that conclusion is its presumption that better management is feasible, in the sense that winners can be picked in advance. It is likely that, as with drilling for oil, recruiting football players, or breeding racehorses, one has to back the low-return efforts to get the successes. As a practical matter, that is, if the policy research budget were to be cut, it is likely that almost as many productive projects would be cut as unproductive ones. [author]