Do cost considerations justify the current production of Extension services in which one or more providers exists in virtually all of the contiguous U.S. states? Using 1995-96 data, we estimate a multi-product cost function for 1,450 public institutions of higher education (IHEs) in the United States, including 65 that provide Extension services. We find significant (diseconomies) economies of scale with respect to the provision of Extension services by the (largest) smaller IHEs. We conclude that regionalizing the provision of Extension services and/or shifting the provision of Extension services from the largest 1862 institutions to smaller 1890 institutions would improve cost-effectiveness.

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