Economies of size of usda agricultural research stations

The large number of small research stations associated with the Agricultural Research Service (ARS) of the USDA has become a concern of efficiency-minded advisory groups. Cost per unit of output (essentially refereed journal articles) was used to provide a basis for comparisons of productivity among ARS research stations of different size. A U-shaped long run average cost curve fitted to the data suggests that increasing economies of size prevail for the large number of relatively small research stations, while decreasing economies of size exist for the relatively larger stations. The lowest cost per unit of output was associated with research stations with approximately 35 scientist years.