Endogenous Commodity Policies and the Social Benefits from Public Research Expenditures

Standard analyses of social benefits of public agricultural research expenditures in the presence of commodity policies take the commodity policy as fixed. In reality governments adjust commodity policy levels when the research has important income distributional effects. We use two examples of commodity policies to analyze the consequences of endogenizing commodity policies under three alternative decision-making models of government. Relaxing the assumption of fixed commodity policies has important impacts on conclusions regarding the social benefits of research in the presence of commodity policies. Copyright 1998, Oxford University Press.