Returns to investment in education: A global update

IFPRI has long argued that spending on agricultural research constitutes a sound investment in poverty reduction and agricultural and economic growth, through improvements in productivity. This argument is based partly on the reported evidence of high rates of return to agricultural research, typically believed to be in the range of 40–60 percent per year. Yet there continues to be controversy over whether these figures are to be believed, and over what they actually indicate. This study represents the first attempt to take a comprehensive look at all the available evidence on rates of return to investments in agricultural R&D since 1953, and the only attempt to do so in a formal statistical fashion. This report has compiled and documented the literature in ways that make it more accessible and more useful to other researchers and policymakers, as well as others interested in the evidence. The analysis reveals some systematic patterns and some sources of biases that make it easier to interpret the evidence and draw meaningful conclusions. (Excerpted from Summary by Per Pinstrup-Andersen)

http://impact.cgiar.org/sites/default/files/pdf/8.pdf

A meta-analysis of rates of return to agricultural R&D : ex pede Herculem?

Development strategies increasingly emphasize agricultural development, employment, and equity; it is therefore important to examine the role of education in light of these new emphases. The purpose of this paper is to synthesize the conclusions of a number of studies of the effect of a farmer's educational level and exposure to extension services on his productivity. Eighteen studies conducted in low-income countries provided 37 sets of farm data that allow a statistical estimation of the effect of education. The overall conclusion of this paper is that farm productivity increases as a result of a farmer's completing at least 4 additional years of elementary education rather than none. Also, the effects of education were much more likely to be positive in modernizing agricultural environments than in traditional ones.

Farmer education and farm efficiency: a survey

Agricultural research and extension programs have been built in most of the world's economies. A substantial number of economic impact studies evaluating the contributions of research and extension programs to increased farm productivity and farm incomes and to consumer welfare have been undertaken in recent years. This chapter reviews these studies using estimated rates of return on investment to index economic impacts. In almost all categories of studies, median (social) estimated rates of return are high, (often exceeding 40 percent) but the range of estimates was also high. The chapter concludes that most of the estimates were consistent with actual economic growth experiences.

Economic impacts of agricultural research and extension

Education has been recognized as critical to the success of economic policies, equitable income distribution and the reduction of poverty. However, just when more and better education is needed, much of the world's population is being left behind. As successful participation in the world economy becomes more knowledge-intensive, many countries face the challenge of improving their educational systems. To varying degrees they must : a) bring their education up-to-date in transmitting knowledge and skills for dealing with the problems of the future; b) equalize access to high quality schooling; c) raise the level of math, language, and science acquisition; d) improve the effectiveness of educational resources; e) develop new approaches to schooling the disadvantaged; and f) develop mechanisms for the generation, acquisition, and application of appropriate knowledge.

Education and Development: Evidence for New Priorities

This study tests the hypothesis that education has a major role in agricultural development by estimating costs and returns of schooling and extension in areas at various modernization levels. Public and private costs are estimated from secondary information and farm surveys. Value-added and auxiliary equations, estimated from farm-level data, are used to derive annual returns of education. Although based on weak statistical results, schooling returns are negative or low, but increase with modernization level. Extension returns are generally high for individuals, but cover social costs in only two geographic areas. This suggests education's role in development may be limited.

Earl W. Kehrberg

Papers

Costs and Returns of Education in Five Agricultural Areas of Eastern Brazil

The Comparative Advantage Aspects

Analyzing the Solution Tableau of a Simplex Linear Programming Problem in Farm Organization