1. Data Needs for Agricultural R&D Evaluation Liangzhi You
Training Workshop on Impact Assessment of Agricultural Research in Tanzania

2. Parameters in R&D Evaluation
Scenario Constants
Market regions
Base year
Simulation period
Real discount rate
Market Information
Initial price

3. Parameters in R&D Evaluation
Market Information
Supply
Initial quantity
Elasticity
Exogenous growth rate
Tax/subsidy
Demand
R&D Parameters

4. Market Region: Spatial Aggregation
Nature of the evaluation
Data availability
Reduced data needs
Easy to observe and interpret R&D effects
Increased data needs
Important markets and production zones
Homogeneous
Fewer regions
Disaggregated
More Regions

5. Many Disaggregation Opportunities
Geopolitical regions
Income groups
Agro-ecological zones
Adoption domains
Production systems
Processing/marketing chain

6. Use GIS Overlay to Define Spatial Analysis Unit+
Slow
Adoption
Rapid
Humid Zone
Dry Zone
Region B A
SPECIFIC
AGROECOLOGICAL
ZONES
MARKET
REGIONS
ADOPTION
DOMAINS
PRODUCTION
AREAS 1 2 3 5 4 R
GIS OVERLAY
Homogeneous units
with respect to the
impact of new technology

7. Spatial and Socioeconomic Definition of regions

8. EXAMPLE: Egypt Rice

9. EXAMPLE: Uganda (Agroecological)

10. Discount Rate: Capital budgeting
Scenario Constants
Base Year: Benchmark
Most recent 2~3 years (e.g )
Simulation Period
Normally 10 ~ 30 years
Discount Rate: Capital budgeting
Nominal vs. real discount rate
Real discount rate 3~5%

11. Initial Price Price Market level: farmgate, wholesale, border
Border price
CIF (cost, insurance and freight)
FOB (Free-on-board)
Exchange rate
Data sources
Market surveys
FAOSTAT
Different meaning price level

12. Supply and Demand Quantities
Production
Three-year average
ROW production for multihorizontal market
Consumption
Market equilibrium over all regions
Same form as production, price
Data Sources
National statistics
FAO
Production/consumption surveys
Consumption = production + Import – Export – Stock change

13. Exogenous Growth Demand Growth w/o research
Population growth
Income growth
Demand Growth=Pop. Growth + Income elasticity *Income Growth
Production Growth w/o research
Area expansion
Yield growth not attributed to research
Data sources
UN Population Division
World Bank: Word Development Indicators
FAO
National statistics

14. Elasticity
Estimating elasticity needs time and resources
Borrow elasticity from other situations but be careful
Long-run vs. short-run elasticity
Single commodity vs. aggregate of commodities
Dynamic response
Single commodity model

15. Elasticity (cont.) Supply Elasticity Demand Elasticity
Big effect of the factors’ supply elasticities
Agricultural product: 0.1~1.0
Demand Elasticity
Very small demand elasticity for staples
Higher elasticity for luxury foods
Majority of food: 0 ~ 1.0

16. Income Elasticity Income Elasticity Reflect consumption pattern
From household/consumption survey
Income elasticity of multiple uses
Si is the share of total quantity used for product i, and etaiI is income elasticity for product I. It means that if we have different uses of commodity j, the income elasticity is equal to the shared weighted sum of the income elasticities of demand for the final products. E.G.Maize: Feed vs Food.

17. Income Elasticity (cont.)
Data Sources
Isabelle Tsakok (1990), Agricultural Price Policy
H. Askari and J. Cummings(1976), Agricultural Supply Response: A Survey of Econometric Evidence
Estimation from household surveys

18. Income Elasticities in Egypt
Commodities
Urban
Rural
Egypt
Fino bread
0.22
0.09
0.13
rice
0.27
0.24
Maize flour --
0.03
0.02
Other cereal
0.31
0.38
0.37
Cooking oil
0.21
0.26
0.23
Sugar
0.52
0.61
0.56
Vegetables
0.59
0.68
0.63
Meat
0.81
0.73
Eggs& milk
0.66
0.62
Source:H. Bouis et al (1999), Patterns of food consumption and nutrition in Egypt, IFPRI

19. Demand Elasticities in Egypt
Commodities
Urban
Rural
Egypt
Fino bread
-0.85
-0.90
rice
-0.86
-0.87
Maize flour --
-0.88
Other cereal
-0.89
-0.91
Cooking oil
Sugar
-0.96
-0.98
Vegetables
-0.97
Meat
-1.00
-1.01
Eggs& milk
-0.99
Source:H. Bouis et al (1999), Patterns of food consumption and nutrition in Egypt, IFPRI

20. Government Policies Many types
tax/subsidy on production, inputs or trade
Price fixing: target (minimum) price, ceiling (maximum) price
Quantitative restrictions: Quotas
Main findings (Alston and Martin, 1992 )
Patterns of research benefits changed relative to free trade
The changes depend on specific interventions
The gain or loss of total welfare of research is equal to the loss or gain of social cost of the market intervention
Tax/subsidy can be treated as price distortion. They are included in DREAM.

21. Sensitivity Analysis for Egypt Rice
Baseline Data
Simulations period: 20 years
Discount rate: 3%
Supply Shift: 1%
Region
Supply
Demand
Price
Supply Elasticity
Demand Elasticity
(1000 tons)
US$/ton
Egypt
3,277
2,520
240
1.0
0.5
ROW
50,908
51,665
210

22. Sensitivity Analysis for Market Parameters
Elasticity (demand, supply or transmission) affect benefits distribution, not total benefits.
Egypt is an exporter, so the impact of supply (quanity, growth) is felt on consumer benefits too. If an importer, demand will affect producer benefits.

23. Example Structure of simulations
ASARECA example I cited before.

24. My Input Data Format

25. Market Data and Analysis
Analysis is only as accurate as the underlying data
Analyst’s own judgment and experience is important
Address Sensitivity analysis
Be careful of interpreting the results and any policy implications

26. Key Points for Market Data
Deciding analysis regions is fundamental
Consistency of commodity form for price, supply and demand
Implication of different levels of prices at market chain
Importance of elasticities
Guides of Sensitivity analysis

27. Overview of Data Needs by Region Type