Providing and maintaining roads are major public services. Costs of these services are influenced by many factors. This paper examines the influence of two factors, size of operation and type of administrative organization, on costs of rural roads.An administrative unit providing roads for a small area, county, or township, with a given density of roads might experience higher costs per unit of area than an administrative unit providing road service for a larger area, all other conditions being the same. It likely would experience disadvantages in buying supplies and equipment, making full use of equipment, hiring competent help, and in other ways. However, the unit with a large area could run into diseconomies through high administrative and supervisional costs. Actually, it may not be that simple. This study tests the idea empirically.

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