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Higher Education Costs and the Production of Extension

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  • Laband, David N.
  • Lentz, Bernard F.

Abstract

Do cost considerations justify the current structure of production of extension services in which one or more providers exists in virtually all of the contiguous U.S. states? Provision of extension services has sizable cost implications for the host institutions. Yet, to our knowledge, there has been virtually no analysis of the impact of extension on higher education costs. Using academic year 1995-1996 data, we estimate a multiproduct cost function for 1,445 public institutions of higher education in the United States, including 65 that provide extension services. We find evidence of significant economies of scale with respect to the provision of extension services but no evidence of significant economies of scope between the provision of extension and the production of research, undergraduate education, or graduate education.

Suggested Citation

  • Laband, David N. & Lentz, Bernard F., 2005. "Higher Education Costs and the Production of Extension," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(1), pages 1-8, April.
    • Handle: RePEc:ags:joaaec:43734
    DOI: 10.22004/ag.econ.43734
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    References listed on IDEAS

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    1. Richard E. Just & Wallace E. Huffman, 1992. "Economic Principles and Incentives: Structure, Management, and Funding of Agricultural Research in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(5), pages 1101-1108.
    2. Anderson, Jock R. & Feder, Gershon, 2007. "Agricultural Extension," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 44, pages 2343-2378, Elsevier.
    3. Ariel Dinar, 1989. "Provision of and Request for Agricultural Extension Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 294-302.
    4. Ariel Dinar, 1996. "Extension Commercialization: How Much to Charge for Extension Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 1-12.
    5. Cohn, Elchanan & Rhine, Sherrie L W & Santos, Maria C, 1989. "Institutions of Higher Education as Multi-product Firms: Economies of Scale and Scope," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 284-290, May.
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