The Changing Cost of Performing Agricultural Research: An Index Approach

Inflation erodes the purchasing power of dollars in every budget in our society. Budgets of agricultural research organizations have been no exception. Inflation has been defined as an increase in the average of prices {I}. A popular indicator of the rate of inflation is the annual percentage change in the Consumer Price Index (cpr) {2}, The CPI is intended to apply to consumer purchases, yet the concept implies that a similar indicator of the annual percentage change in prices of inputs purchased by agricultural research organizations conceivably could be developed. This paper reports an attempt to develop a quantitative measure of changes in the purchasing power of dollars appropriated from 1973 to 1978 for agricultural research in state agricultural experiment stations (SAES). It is intended to be a complete agricultural research price index, constructed to provide an accurate index for deflating the rising dollar expenditures for agricultural research to constant purchasing power. It is hoped such an index will lead to more accurate forecasting of the rate of increase in the cost of doing research and thus help agricultural science administrators adjust for inflation in budget making and expenditure programming.

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 Record created 2017-04-01, last modified 2017-08-25

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