The gains from research into tradable commodities

This paper develops a model for assessing the aggregate level and distribution of the benefits of reseach into tradable commodities. It estimates gains to Australia and to the rest of the world from research into the wool and wheat industries. Key words: research and development, trade, wheat, wool. Market models have been widely used to ex-amine the gains from research into agricultural commodities. Norton and Davis have recently reviewed the methodology and published ap-plications. Research makes possible a down-ward shift of the supply curve, and gains are measured as changes in economic surplus. Many studies consider the case of a nontraded good and assume that research affects all pro-duction units. Only a few studies have allowed for international trade. Some, such as Akin