An Economic Analysis of the Returns to Canadian Swine Research: 1974–97

This paper reports a new set of estimates of the returns to swine research in Canada. These estimates were obtained using Agriculture and Agrifood Canada's Canadian Regional Agricultural Model (CRAM). Positive Mathematical Programming was incorporated into the model for use in this study. The CRAM allows the effects of supply shifts from technological change in the hog industry to interact with product and factor market conditions in the rest of Canadian agriculture. Previous estimates of the returns to Canadian swine research were obtained with a partial equilibrium model that did not allow for intra-sectoral resource use adjustments. Extensive sensitivity analysis was conducted to examine the robustness of the return estimates under variations in some of the key assumptions employed in the analysis. The costs of public and private sector swine research were estimated. Public sector research costs were inclusive of the marginal excess burden of taxation. Overall, the estimated benefits from Canadian swine research were high relative to the estimated costs for the time period considered. The estimated returns obtained in this study were higher than those obtained in an earlier study that used a partial equilibrium approach, but the differences in returns are not solely attributable to this single change in the method used in the analysis.