Determinants of the Demand for State Agricultural Experiment Station Resources: A Demand-System Approach
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).
History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.
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1898–present
Historical Names
- Department of Economic Science (1898–1910)
- Department of Economics and Political Science (1910-1913)
- Department of Applied Economics and Social Science (1913–1924)
- Department of Economics, History and Sociology (1924–1931)
- Department of Economics and Sociology (1931–1967)
Related Units
- College of Agricultural and Life Sciences (parent college)
- College of Liberal Arts and Sciences (parent college)
- College of Business (parent college)
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Abstract
We document the decline in traditional federal government support of the state agricultural experiment station system over the 20 years period starting in 1980 and of state government support over the 1990s. This paper presents a model of state government decisions on agricultural research expenditures. The model permits some benefits to be private in the sense that they are state specific and others to be public and spillover to other states. To capture a key aspect of agricultural research, the model includes voluntary and nonvoluntary contributions to a state government’s expenditures on agricultural research. Moreover, we argue that different types and sources of contributions to a state’s agricultural research expenditures can be expected to differ in their potential for private and public good production. The econometric model treats federal grants, federal formula funds and private contract, and a state’s own appropriates for agricultural research as separate inputs in a state government’s demand system for agricultural research. Involuntary transfers are from interstate public and within state spillins. The demand system is fitted to a panel of 48 contiguous states over 1970 to 1999. These results show that the income elasticity of demand for federal grants and private contracts is larger than one (elastic), for state funds is approximately one, and for federal formula funds is significantly less than one (inelastic). We also show that the national ranking of graduate doctorate faculty in basic biological science and capacity in the agricultural experiment station for basic biological science research increase the demand for federal grant and contract resources. The demand for state government support of SAES research is increased by a high Gourman ranking of graduate agricultural science programs.