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- Title
Social Return to Public Information Services: Statistical Reporting of U.S. Farm Commodities: Comment.
- Authors
Smith, Lawrence N.; Scherr, Bruce A.
- Abstract
In a recent issue of the "Review," economists Vujiro Hayami and Willis Peterson present a practical application of economist Alfred Marshall's social welfare concepts.' Their approach, in the tradition of public goods analysis, seeks to measure the social returns to improvements in information about U.S. farm commodities. Their strong theoretical argument is jeopardized by their empirical evidence leading to exaggerated and unrealistic conclusions. The article presents two basic criticisms of their analysis, they use highly inelastic demand elasticities for grains which exclude export and animal feed uses, and their conclusions are dominated by the marginal social returns for only two of the seventeen commodities studied. Their distribution of returns raises specific questions about sampling techniques for the two commodities which may be more important than the broader issue of social returns to public information services. The logic of the theoretical argument presented is that the more inelastic the demand function for a given commodity, the greater is the potential for increased social returns.
- Subjects
UNITED States; COMMERCIAL products; FARM produce; INFORMATION theory in economics; MARSHALL, Alfred, 1842-1924; INELASTIC demand; WELFARE economics; ELASTICITY (Economics); ECONOMISTS
- Publication
American Economic Review, 1973, Vol 63, Issue 5, p1017
- ISSN
0002-8282
- Publication type
Article