AN ECONOMIC EVALUATION OF COTTON AND PEANUT RESEARCH IN SOUTHEASTERN UNITED STATES



The internal rates of return on cotton and peanut research were not very sensitive to the
assumptions about price elasticities of supply or demand. For both commodities, an increase in
the price elasticity of demand resulted in very small decreases in the return on research
investment in that commodity. For both commodities, decreases in the price elasticity of demand
resulted in increases in the internal rate of return on investment. For cotton, an increase in the
price elasticity of supply caused a slight decrease in the return on research investment. A
decrease in the price elasticity of supply of cotton increased the IRR nearly 1%. An increase in
the price elasticity of supply for peanuts increased the return in peanut investment by only .07%.
A decrease in this elasticity decreased the IRR on peanut research by only .05%. Changes in the
price elasticity of supply for peanuts had a minor effect on the return to peanut research
investment.

The internal rate of return above is an average rate of return that does not indicate how
changes in research costs and benefits affected this rate over time. To investigate these changes
in the internal rate of return over time, the period (1963-1995) was separated into three
consecutive 10-year subperiods for each commodity. They will be for the years 1963-1973,
1974-1984, and 1985-1995. An internal rate of return was then calculated for each subperiod to
compare how research investments were performing over time. An initial stream of investments
was established using the seven previous years for each 10- year period. These results are
presented in Table 6.

The estimates for the IRR for the subperiods are not to be taken as accurate since the period
measured is too short to be meaningful. However, it should be noted that they are useful in
showing the trend in the returns to research on these two commodities. The internal rate of
return on cotton investment increased over the three subperiods. Investment in cotton research

20



More intriguing information

1. WP 48 - Population ageing in the Netherlands: Demographic and financial arguments for a balanced approach
2. Social Balance Theory
3. Computational Experiments with the Fuzzy Love and Romance
4. Income Growth and Mobility of Rural Households in Kenya: Role of Education and Historical Patterns in Poverty Reduction
5. Spectral calibration of exponential Lévy Models [1]
6. How Offshoring Can Affect the Industries’ Skill Composition
7. The technological mediation of mathematics and its learning
8. A Rare Presentation of Crohn's Disease
9. Manufacturing Earnings and Cycles: New Evidence
10. Eigentumsrechtliche Dezentralisierung und institutioneller Wettbewerb
11. The name is absent
12. Rent-Seeking in Noxious Weed Regulations: Evidence from US States
13. Pricing American-style Derivatives under the Heston Model Dynamics: A Fast Fourier Transformation in the Geske–Johnson Scheme
14. Globalization, Redistribution, and the Composition of Public Education Expenditures
15. Educational Inequalities Among School Leavers in Ireland 1979-1994
16. CGE modelling of the resources boom in Indonesia and Australia using TERM
17. The name is absent
18. Trade and Empire, 1700-1870
19. THE CHANGING RELATIONSHIP BETWEEN FEDERAL, STATE AND LOCAL GOVERNMENTS
20. Fertility in Developing Countries