Economic Impacts of Structural Particleboard Research

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Abstract:

Investment in research has been widely recognized as having substantial economic payoffs, but empirical analyses quantifying the returns from forest products research have not previously been carried out. This study analyzes the economic impacts of research which led to the manufacture of structural particleboard. Economic benefits resulting from the development of this panel product are due to a variety of factors. Only benefits measurable in terms of savings to consumers are considered in order to ensure a conservative estimate of benefits. An economic surplus model is developed to estimate research benefits, and public and private research expenditures are estimated. Average internal rates of return from investment in structural particleboard research range from 19 to 22 percent, depending on the assumed percentage price differential between structural particleboard and softwood plywood, price elasticity of demand, and projected future production. A sensitivity analysis reveals that the rate of return is quite insensitive to the research cost estimate. Estimated marginal rates of return ranged from 27 to 35 percent, implying that an additional dollar invested in structural particleboard research will produce an annual return of between 27 and 35 percent into perpetuity. Forest Sci. 30:685-697.

Keywords: Research evaluation; consumer surplus; technical change

Document Type: Journal Article

Affiliations: Research assistant, College of Forestry, University of Minnesota, St. Paul, MN 55108

Publication date: September 1, 1984

More about this publication?
  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
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