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The Sensitivity of Returns to Research Calculations to Supply Elasticity
Author(s) -
Oehmke James F.,
Crawford Eric W.
Publication year - 2002
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/1467-8276.00303
Subject(s) - elasticity (physics) , sensitivity (control systems) , economics , price elasticity of supply , econometrics , microeconomics , price elasticity of demand , engineering , physics , thermodynamics , electronic engineering
Returns to research are thought to be robust under alternative supply elasticity assumptions. We show, both conceptually and numerically, how advances in approximating social benefits make returns to research sensitive to the supply elasticity. Despite this greater sensitivity, these advances retain conceptual and practical advantages. We make recommendations for dealing with the increased sensitivity.