AGRICULTURAL-RESEARCH EXPENDITURES IN THE UNITED-STATES - APUBLIC GOODS PERSPECTIVE

This paper presents econometric evidence on two different public good formulations of agricultural research: pure public and joint-product m odels. A nested test for simultaneous equations is proposed and applie d for distinguishing between the two models. The procedure is used for testing for neutrality. Using data from 1951 - 1985, we illustrate th e technique with two-stage least squares estimates for 48 U.S. states. An overwhelming number of sample states abide by the joint-product mo del. Price and full income elasticities are presented.