ESTIMATING EFFECTS OF AGRICULTURAL RESEARCH AND EXTENSION EXPENDITURES ON PRODUCTIVITY: A TRANSLOG PRODUCTION FUNCTION APPROACH

The effects of agricultural research and extension expenditures on productivity in the United States are estimated during the period 1949-81 using data for ten production regions. The large time-series cross-sectional data base allows the translog production function to be estimated directly. Results from the translog and Cobb-Douglas production functions are compared. The results indicate that use of the Cobb-Douglas production function would overestimate the internal rate of return of agricultural research and extension expenditures in the United States and eight production regions. The total marginal product and internal rate of return for the United States are $8.11 and 66 percent, respectively.