The extent to which inflation has eroded the real purchasing power of public agricultural research budgets is poorly understood. Official Government research and development (R&D) statistics use the gross national product (GNP) deflator to express research expenditures in constant dollars, despite the serious shortcomings of such a broad indicator of inflation for deflating research expenditures. A State Agricultural Experiment Station (SAES) research price index is calculated in this paper and compared with the GNP deflator. The GNP deflator substantially underestimated the rate of inflation in SAES research in recent years mainly due to real growth in faculty compensation during the 1980's. The divergence between the SAES research price index calcuated in this study and the GNP deflator indicates that the purchasing power of SAES research is significantly less than estimates based on the GNP deflator would suggest.