Social benefits of Chilean agricultural research in a price distorting policy context

Jaime Ortíz1, Jeff Alwang2, y George Norton3

The interactions between price and research policies are formally addressed in this study in order to avoid biased estimates of the benefits that Chile gets from agricultural research. Government price policies influenced the innovative behavior of the main Chilean public research institution and reduced the research benefits that could have been obtained under free trade conditions. Despite the existence of market distortions caused by commodity price policies, Chilean benefits from public agricultural research were positive. However, the net economic surplus changes would have been higher if output price interventions had been aimed at reducing distortions and putting producer prices more in line with international prices.

Keywords: price policies, agricultural research, economic surplus changes, Chile.
1 Euroconsull B.V., Casilla 17-07-9859, Quito. Ecuador.
2 Euroconsull B.V., Casilla 17-07-9859, Quito, Ecuador.
3 Department of Agriculture and Applied Economics, Virginia Tech., Blacksburg, VA 24061, USA.