Urban First: USDA Research Impacts on Regional Total Factor Productivity

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November 1, 2016 - Jason Parker, John T. Mann and Scott Loveridge

We use a production function approach using the Bayesian Information Criterion (BIC) to identify the lag structure and magnitude of the impact of USDA and non-USDA research expenditures on total factor productivity (TFP) in rural and urban areas. We identify a statistically significant seven-year lag structure in both rural and urban areas. The USDA expenditure impacts are stronger in urban areas for the earlier portions of the lag function and come later in rural areas; the model finds non-USDA research expenditures have no TFP effect on rural areas. The model outputs are illustrated with state maps.

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