موردی برای رویکرد گزینه های واقعی برای تجزیه و تحلیل هزینه و منفعت مورد انتظار طرح های پژوهشی کشاورزی

The United States Agency for International Development (USAID), like many other development agencies and donors, increasingly emphasizes evidence-based programming. This requires assessments of project performance at all stages of implementation, comprising ex-ante impact assessment, monitoring and evaluation, and ex-post attribution of outcomes. Ex-ante impact assessment, in particular, involves performing Cost-Benefit Analysis (CBA) to determine the Expected Net Present Value (ENPV) of the project in question. Unfortunately, the traditional ENPV approach has proven inadequate for dealing with uncertainty in the timing of investments and flexibility in future decision making. This is especially relevant for Research and Development (R&D) projects which require several stages of product development and multiple rounds of testing prior to releasing final products. As a consequence, the real-options approach to CBA has increasingly been used to evaluate private sector R&D projects. This paper advocates for the adoption of the real options approach in the evaluation of public investments in agricultural research, and illustrates its practical utility with an assessment conducted by USAID to determine the economic viability of a proposed project to develop improved varieties of critical food security crops in Uganda.

Development agencies and donors increasingly emphasize evidence-based programming. This renewed focus relies on assessments of project performance at all stages of implementation, comprising ex-ante impact assessment, monitoring and evaluation, and ex-post attribution of outcomes. USAID is specifically applying Cost-Benefit Analysis (CBA) for ex-ante impact assessment within its billion-dollar investment in agriculture and nutrition under the Feed the Future initiative. By applying CBA, USAID is able to determine which investments offer the best prospects of generating the highest possible return in terms of higher incomes or reductions in negative health outcomes. Moreover, USAID is able to more clearly demonstrate to host countries and the U.S. public alike what it is achieving with scarce development funds. Investments in agricultural Research and Development (R&D) are critical elements of the Feed the Future initiative, and as such must be subjected to CBA. Unfortunately, traditional CBA models have proven inadequate for analyzing research projects. Agricultural research, like most research, requires several stages of product development and multiple rounds of testing prior to releasing final products (new or improved seeds, for example). The high degree of uncertainty and the options built into research projects require a more flexible and robust analytical model than the traditional Expected Net Present Value (ENPV) model. To address this shortcoming, we advocate adoption of a real-options approach to CBA. Although it is widely used in private sector research evaluation, the real options approach remains largely at the fringes of impact assessments of public sector projects. While we know of no study specifically dedicated to agricultural research, some path-breaking studies have demonstrated the effectiveness of the real options approach in evaluating the adoption of new technologies in agriculture and other applications. Purvis et al. (1995) use the concept of real options to model technology adoption decisions under uncertainty. Taur (2006) and Hyde et al. (2003) apply the approach to the analysis of dairy farming technologies, and Mushoff and Odening (2008) evaluate organic farming decisions as real options. The paper proceeds as follows: Section A presents a discussion of cost-benefit analysis within the precepts of decision theory. We demonstrate the limitations of traditional ENPV under conditions of uncertainty. Section B lays forth the necessary variation in the form of the real-options approach, demonstrating the flexibility of this CBA methodology to address challenges associated with research and development investments. In Section C, the application of the methodology to R&D investments in Uganda is used as a case study to illustrate the process and results of using the real-options approach. Section D draws from the Uganda case to illuminate necessary information that researchers can provide to inform the methodology. Section E concludes.

Donor agencies like the United States Agency for International Development are increasingly seeking evidence of economic and developmental impact from their funding and investments. One means to determine that impact is through the use of cost-benefit analysis, which requires modification to be properly applied to investments in agricultural research and development. The real options method provides one potential, targeted methodology to model investments in research and development. The real options method is well-suited to determine the economic impact of such investments, but should be subjected to future improvements that will allow analysts to overcome current challenges and develop more realistic CBA models better fitted to research investments. Both existing and future cost-benefit analysis methodologies can only be applied with meaningful contributions from the research community. By providing additional information – estimates of probability, potential impact, funding sources, and possible side-effects – agricultural researchers will help ensure that cost-benefit analysis is more properly applied to capture the true economic impact of their efforts.