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Abstract
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.