Agricultural Research: A Study of the Demand for Public Goods.

by J. Guttman

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Develops a model of the demand for public goods, and applies the model to explain cross-sectional differences in public allocations to agricultural research in the United States. The model postulates that demanders of agricultural research on the state level--primarily farmers and firms producing agricultural inputs--contribute voluntarily to lobbying activity, which in turn induces research allocations. The effect of group size on a Cournot equilibrium of aggregate contributions is shown to be positive. A "concentration effect" is derived which states that the share of contributions contributed by the relatively large demanders increases, and the share contributed by the relatively small demanders decreases, as group size becomes large. These implications of the model are found to be consistent with American data on agricultural research allocations in 1969. 47 pp. Ref. (Author)

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