A Cost Benefit Analysis of Research
| International Journal of Economics and Management Studies |
| © 2017 by SSRG - IJEMS Journal |
| Volume 4 Issue 7 |
| Year of Publication : 2017 |
| Authors : Kanupriya Suthar |
10.14445/23939125/IJEMS-V4I7P109
How to Cite?
Kanupriya Suthar, "A Cost Benefit Analysis of Research," SSRG International Journal of Economics and Management Studies, vol. 4, no. 7, pp. 35-38, 2017. Crossref, https://doi.org/10.14445/23939125/IJEMS-V4I7P109
Abstract:
Markets are efficient resource allocators for private goods but not so in the case of public goods which have social returns larger than private returns. Research activities have positive externalities and spill over effect which market fails to take into account. Research has its own costs and benefits. These benefits are larger in social domain, so higher expenditure on research is desirable from social perspective. Government intervention is expected in such scenario to re-establish the balance of cost and benefit equation for research at a socially optimal point.
Keywords:
Public goods, private rate of return, social rate of return, resource allocation, equilibrium, market failure, R&D.
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