The economics of containerized forest tree seedling research in the United States
There is extensive evidence that research has a significant effect on increases in productivity, which in turn has a positive effect on economic growth and development. This study examines the economic impacts of research that led to a forestry innovation, containerized forest tree seedlings. Economic benefits resulting from the development of this method of reforestation are attributable to numerous sources, although only benefits measurable in terms of savings to consumers are considered in this analysis to ensure a conservative estimate of benefits. An economic surplus model is utilized to estimate research benefits. Public and private research expenditures are estimated using screened publication counts and by contacting firms who have undertaken or who are conducting containerized seedling research. Average internal rates of return from investment in containerized seedling research range from 37 to 111%, depending on assumptions concerning the percentage price differential between containerized and bare-root seedlings, and research cost estimates. A sensitivity analysis shows that the rate of return is insensitive to estimates of future production. Results from research evaluations such as this can supply background information for decision making, provide support for decisions already made (or provide impetus for changing decisions), and give verification or refutation of ideas.