Estimating Economic Value of Applied Research Projects (original) (raw)
Universities manage research projects through both internal funding and support systems for the generation of external grant funds. The management of a research project is full of uncertainty and complexity. An economic evaluation of university research projects can determine the economic impact on society and can generate a return on the investment from federal and state funds. This paper presents a simple method that uses an Excel spreadsheet to estimate the economic value of research at the project level. Three sample calculations were conducted for agricultural research projects (on pecan irrigation, a new variety of bigtooth maple tree, and evaluation of new alfalfa varieties) to demonstrate the methodology. The research on new alfalfa varieties obtained the highest benefit:cost ratio (123:244). This supports the concept that variety trials have one of the highest potential paybacks of any agricultural research. An economic analysis of the benefit:cost ratio and a net present value for most applied research are easy to compute with the presented Excel calculator. When the economic analysis includes a large number of environmental values, more time and effort are needed to conduct the analysis, but an economic analysis remains possible. If used as part of research proposal submission, the economic analysis could give reviewers another method to rank research proposals and select those proposals that not only propose good science but also have a potential reasonable return on taxpayers' investments.
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