Endogenous Technological Change in U.S. Agriculture: A Direct Test of the Induced Innovation Hypothesis

摘要

A model of public research prioritization is developed to derive a direct statistical test of price-induced technological change in U.S. agriculture. Econometric results are highly consistent with the induced innovation hypothesis. The land- and labor-saving technical biases in U.S. agriculture can largely be explained by factor price movements. There is evidence of strong fundamental land- and labor-saving biases which cannot be explained by price movements alone. The increase in private research expenditures relative to those of the public sector has generated further labor-saving and machinery-using biases. A public research strategy of minimizing unit farm costs may amplify static resource misallocations due to externalities and market distortions. Problems of coordinating environmental and technology policies are discussed.