THE IMPACT OF FARM AND PROCESSING RESEARCH ON THE AUSTRALIAN WOOL INDUSTRY*

An equilibrium displacement model of the world wool top industry is used to estimate the returns to the Australian wool industry from productivity improvements in farm production, in top making and in textile manufacturing. The returns to the industry from these different types of research and development are sensitive to the extent of substitution possibilities between Australian wool and other inputs used by the wool processing and textile industries but it appears that research resources have to be much more efficient in off‐farm activities for the Australian wool industry to receive benefits similar to those from farm research activities.