The purpose of this study is to provide day care center management and government funding agencies with empirical estimates of the costs of day care centers in Pennsylvania. Based on cost data obtained from the Department of Public Welfare and survey information from the Pennsylvania Day Care Study Project, average and marginal costs of day care services were estimated by employing the least-squares regression technique. The report is divided into five sections: (1) a literature review on four day care cost studies, (2) a description of the cost model used in this study, (3) data analysis (including summary tables), (4) a description of the estimation technique and presentation of the empirical results, and (5) a discussion of policy implications of the empirical cost relationships. Policy recommendations are made as well as suggestions concerning future research and data collection procedures. (Author/SDH)