Market returns, infrastructure and the supply and demand for extension services

Increasingly, countries are experimenting with privatization of extension activities and extension commercialization-the use of cost-recovery mechanisms, such as user fees by public extension agencies (Dancey; Dinar 1996; Organization of Economic Cooperation and Development; Rivera and Gustafson; Umali and Schwartz). Concurrently, economists have begun to assess extension in a market supply-demand framework (Dinar 1989, 1996, Ortmann et al.). Yet, how do markets for extension services behave? What factors drive the supply and demand for extension services? What public investments complement or substitute for extension services? This study uses historical data from Arizona to estimate determinants of extension requests and service provision. Following Dinar (1989), we treat extension requests and provision as endogenous, simultaneously determined variables. The study examines the importance of demand-pull effects as well as transportation and communications infrastructure on commodity-specific extension requests and service provision.