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Extendible hashing is an attractive direct-access technique which has been introduced recently. It is characterized by a combination of database-size flexibility and fast direct access. This paper derives performance measures for extendible hashing, and considers their implecations on the physical database design. A complete characterization of the probability distribution of the directory size and depth is derived, and its implications on the design of the directory are studied. The expected input/output costs of various operations are derived, and the effects of varying physical design parameters on the expected average operating cost and on the expected volume are studied.