Quantifying the Economic Value
Running Head: QUANTIFYING THE ECONOMIC VALUE OF PUBLIC
Quantifying the Economic Value of Public Libraries:
Practitioner Experiences and Perceptions
Susan G. Bristol
Southern Connecticut State University
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Quantifying the Economic Value
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Abstract
Despite providing valuable community services, many public libraries are unable to
obtain adequate funding. Recent studies suggest that libraries must demonstrate their
economic contribution to the community in order to ensure long-term financial survival.
This study investigates the perceptions of public library practitioners with regard to
quantification of the economic benefits from libraries. From a random sample of 400
libraries in New England, 88 participated in an online survey in October of 2008. Almost
half (45.4%) of libraries have conducted some type of economic valuation. Practitioners
indicate that evidence of economic value is essential and the majority (67.1%) perceive a
need for additional tools to quantify economic value. Resource constraints, lack of
expertise, and a shortage of user-friendly models prevent libraries from conducting
economic analysis. Development of practical, cost-effective models and relevant training
will enable more libraries to use economic valuation data to advocate for adequate
funding.
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Quantifying the Economic Value of Public Libraries:
Experiences and Perceptions of Public Library Practitioners
Despite providing valuable services to their communities, many public libraries
struggle to obtain adequate funding. A growing body of research suggests that in order to
ensure long term financial survival, public libraries must demonstrate their significant
economic contribution to the community (Imholz & Arns, 2007). In an effort to quantify
the economic benefits from public library services, a number of recent studies have used
accepted econometric models to place a monetary value on public library services. These
studies have consistently shown that public libraries generate significant positive return
on taxpayer investment and compare favorably to other public agencies in efficient use of
tax dollars (Imholz & Arns).
The majority of the valuation studies have been conducted at the state level or at
large urban libraries. There is little evidence in the literature to indicate how local
practitioners have applied findings from the research to their own libraries, or if they
perceive that quantification of economic value is necessary or effective. This study
investigates the perceptions of public library practitioners with regard to quantification of
economic value. It explores how public libraries express their value to stakeholders and if
practitioners consider economic outcome data useful or effective in advocating for
adequate library funding.
A recent study by Public Agenda (2006) found that 96% of people surveyed
consider public libraries essential for maintaining a productive community. Seventy-five
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percent of the respondents said that their community would “lose something important
and valuable” if the public library closed due to inadequate funding. In the same study,
community leaders indicated the belief that libraries are indispensable institutions.
Nevertheless, positive public opinion of, or demand for library services has not
been shown to result in increased library funding (Allen, 2003; Online Computer Library
Center [OCLC], 2008). The political process in the community plays a distinctly greater
role than need or demand in determining the library funding levels. It is argued that the
determining factors for library budgets tend to be the willingness of local government to
tax its citizens, the willingness of citizens to be taxed, and the allocation of tax revenues
to the library (Allen; Matthews, 2004).
Local tax revenues are the primary source of funding for the public library budget.
These revenues either are the result of a specific library tax levy or are allocated to the
library from a general revenue fund (Act for Libraries, n.d; OCLC, 2008). On average,
81% of public library operating revenues come from local taxes, with the remainder
coming from state, private, and federal funds (Institute of Museum and Library Services
[IMLS], 2007). In recent years, funding from state and federal sources has remained
static or declined and consequently, public libraries have been forced to rely more heavily
on local government or private sources for revenues (OCLC).
Today’s taxpayers have exhibited less willingness to be taxed and less interest in
funding public institutions in general (Buschman, 2005; Holt, 2005). In addition, there is
increased pressure on public institutions for evidence of fiscal responsibility,
accountability, and efficient use of tax dollars (Block, 2007; Holt &Elliott, 2003). More
than one-third of U.S. public libraries have been operating with flat or declining budgets
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(OCLC, 2008). At the same time, libraries have faced increased costs, increased demand
for services and significant capital requirements to replace outdated infrastructure.
Consequently, many public libraries have been forced to make difficult resource
allocation decisions (Urban Library Institute, 2007).
Abrams (2005) argues that public libraries must find meaningful ways to quantify
their value and then use the data to influence the political process. Libraries need to
demonstrate that they are worth the investment of taxpayer dollars, that they compare
favorably to other government-funded programs and that they are carrying out their
mission in a cost effective manner (Matthews, 2004). This evidence will help to reframe
the library as a valuable investment that produces a positive return for the community,
rather than an expensive cost center (Imholz & Arns, 2007).
Holt (2005) and Strouse (2003) argue further that it is critical for libraries to make
their case in language that decision makers understand and that this is most effectively
accomplished using quantitative economic evidence of value. In a recent survey of
directors of “thriving” public libraries, Block (2007) found that the majority of
respondents perceived that emphasizing their library’s return on investment when
communicating with their community was an important contributor to their success
(Block, 2007).
Kaufman (2008) argued that the library profession itself would also benefit from
the ability to quantify the economic value of the library. She noted that the ability to point
to this kind of hard data would validate and confirm what librarians already know but
have often had difficulty expressing; that they provide a valuable service to the
community.
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Traditional Measures of Library Value
Traditionally, public libraries have communicated the value or “goodness” of the
library to stakeholders by collecting and reporting a variety of statistics that measure
library activities. Input measures such as operating budgets or collection size, output
measures, such as circulation data, library visits or program attendance and process
measures that quantify efficiency are all commonly used (Deane, 2003; Matthews, 2004).
Input/output statistics tell libraries and their stakeholders what they are doing and
whether or not they are efficient but fail to express or quantify the resulting outcome or
benefit of their activities (Clay & Bangs, 2006). Nevertheless, they have been widely
used to provide data for internal management processes and have frequently been used to
benchmark a library’s performance relative to its peers. Many public libraries have relied
on Hennen’s American Public Library Ratings Index (HALPR) as such a benchmarking
tool (Hennen, 2008).
Use of qualitative information is another traditional means of describing public
library value. Patron satisfaction surveys and focus groups provide anecdotal evidence
that can be useful in telling the library’s story and adding color to statistics (Imholz &
Arns, 2007). However, qualitative information suffers from the same shortcoming as
input/output statistics, in that it does not quantify the outcomes or benefits that result
from library activities expressed in economic or other terms. Consequently, the focus in
library assessment is shifting from outputs to outcomes (Holt & Elliott, 2003).
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Quantifying Library Economic Value
Over the last decade, a number of studies have been conducted with the intent of
quantifying the economic benefits of public libraries. A review of the research suggests
that these studies have provided new models to articulate the quantitative value of a
public library. In a world of limited resources, this data based economic evidence has
received increased attention as funding advocacy tool.
A recent report sponsored by the Americans for Libraries Council indicated that
in general, library valuation studies have shown that public libraries provide significant
quantifiable economic benefits to their communities and outperform other sectors in the
efficient use of tax dollars (Imholz & Arns, 2007). The authors also noted a number of
barriers to moving forward with using the findings of these studies as advocacy tools.
They point to a lack of consistency in the methods and metrics, lack collaboration or
coordinated research, and a shortage of guidance for individual practitioners. To
overcome these barriers, the authors advocated coordinated research and advocacy efforts
at the national level, and development of appropriate models, tools, and training.
Recent studies have focused quantifying library value using econometrics
traditionally used in the private sector, such as cost-benefit analysis and return on
investment (Imholz & Arns, 2007). There have been a number of studies conducted in the
United States at both the state and local level (Barron, Williams, Bajjaly & Arns, 2005;
Griffiths, King, Tomer & Harrington 2004; Holt, Elliott & Moore, 1999). Similar studies
have been conducted internationally. Norway (Aabo, 2005), Canada (Fitch & Warner,
1998), the U.K. (Hawkins & Sumsion, 2001), and Australia (McCallum & Quinn, 2004)
have all conducted public library economic valuation studies. While the methodologies
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and metrics across these studies have differed, in every case the results have shown that
the return on investment to the community was positive (Imholz & Arns).
Economic Valuation Studies and Methodologies
The literature shows that there have been a variety of approaches to conducting
library economic valuation studies. These include a cost-benefit model that quantifies the
library’s return on taxpayer investment, calculation of the secondary economic effects of
library expenditures on the economy, determination of the economic impact of the library
on the geographic region and estimation of the library’s contribution to local economic
development (Imholz & Arns, 2007).
Cost-Benefit Analysis. The cost-benefit analysis model (CBA) of economic
valuation has been the most commonly used model in the major studies conducted to
date. In a groundbreaking article, Holt, Elliott and Dussold (1996), first proposed a CBA
model for determining economic value of public libraries. The authors intended that
model would provide a transportable methodology that could be adapted for use in many
large urban libraries. Holt, et al. (1996) noted that while libraries had used CBA
techniques on a smaller scale, their model proposed using CBA to evaluate the library as
a whole. The goal of the CBA model was to quantify the economic benefits received
from the library and express it as a return on taxpayer investment. That is to say, for
every one dollar of taxpayer funds spent on the library, the library provided “x” dollars of
benefit.
The first uses of CBA were a seminal study of the St. Louis Public Library and
subsequent studies of six other urban public libraries, funded by the Institute for Museum
and Library Services (Holt, et al., 1999). The St. Louis study calculated a range of
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economic benefits from the library found that on average, for every $1.00 of taxpayer
funds invested in the library, the direct benefit accruing to the community was $4.00
(Holt, et al., 1999). The authors noted that this return might appear unrealistically high to
business leaders or library board members. They stressed the importance of conveying
that current return on investment from the library is a function of both the past investment
in the library and the current year’s investment, and that both are crucial to survival.
To apply CBA, a monetary value must be assigned to both the cost and the
benefit sides of the equation. Quantification of the costs of library services is relatively
straightforward, and is usually expressed as library revenues from public sources, or in
other words, taxpayer funds (Holt et al., 1996). In contrast, quantification of benefits is
both more complex and more problematic. Library services are non-market goods that are
“free” to the user, so to quantify the benefit, the market value equivalent of a library
service must be either estimated or assigned based on a market substitute (Holt et al.,
1996).
In the CBA model, two types of economic benefits are considered. These are
direct and indirect benefits. Direct benefits refer to benefits experienced by the individual
or entity using the library service. Examples of direct benefits are the use of library
materials, participation in library programs, and the use of internet access. There are a
number of methods that have been commonly used to estimate or assign a dollar value to
direct economic benefits. There is no consensus in the field at this point as to which is
method is preferred and in fact, many of the studies to date have used more than one
method to determine value (Imholz & Arns, 2007). Two of the most commonly used
methods are consumer surplus and contingent valuation (Matthews, 2004). The St. Louis
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study incorporated both of these methods to arrive at a value for direct benefits (Holt et
al., 1999).
Consumer surplus refers to the price a rational consumer would pay for a
particular good over its market price (Matthews, 2004). In the case of “free” library
goods and services, this involves finding the appropriate market substitute and assigning
a reasonable price to it. There appears to be no consensus as to how to arrive at the
appropriate market substitute price and in practice, the assigned values used have
diverged greatly across studies (Imholz & Arns, 2007).
As an example, in the Ohio study, the value assigned to one circulation of a book
was the acquisition price of the book, less a 50% discount. Using this formula resulted in
a calculated value of $58.3 million for all book borrowing in 2005 (Levin, Driscoll &
Fleeter, 2006). In contrast, the Indiana study used a value of 20% of the average price of
a new hardcover book per circulation. This method was based on the view that the
appropriate value for a non-market good is the cheapest substitute available in the market.
The active online used book market indicated that 20% was the appropriate discount
(Indiana Business Research Center, 2007).
Contingent valuation is a survey model for attributing direct value. It has
traditionally been used in the environmental science and natural resources fields to value
intangibles such as open space. This model has more recently migrated into use in the
social sciences (Chung, 2008). Essentially, contingent valuation involves surveying
patrons to determine what amount they would be willing to pay for library services if the
public library didn’t exist. This is a more time consuming, costly, and controversial
approach than consumer surplus and also has the potential to overstate values, due to the
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subjective nature of the process. As Chung noted; what patrons say they would be
hypothetically be willing to pay may not reflect reality.
Indirect benefits refer to those that accrue to third parties or to the community at
large from the activities of the library (Holt, et. al.1996). As an example, library support
for lifelong learning and literacy activities can be credited with resulting in a more
educated, literate population. This outcome, while perceived as valuable, is very difficult
to quantify (Holt, et al., 1996; Matthews, 2004). The quantification of indirect benefits is
also complicated by the fact that the library may have value to both users and non-users
in the community. Quantifying indirect benefits to non-users is very complex, but leaving
this benefit out understates value (Indiana Business Research Center, 2007). The St.
Louis study did not attempt to capture indirect benefits. In that study, Holt, et al. (1999)
made the case that a return on investment statistic derived only by including direct
benefits would provide a more credible, conservative value.
A number of more recent studies have attempted to attribute indirect economic
benefits from public libraries, although this has generally been done with qualitative,
rather than quantitative data. One of these was the Indiana study, which focused
specifically on indirect benefits arising from the library’s role as a partner in economic
development and its support for local business (Indiana Business Research Center, 2007).
The study did not quantify these benefits, but instead used survey techniques to capture
the perceptions of patrons, businesses, and community leaders. It found that while public
libraries in that state are considered important players in economic development, more
outreach and services for economic and business development were needed.
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Similarly, as part of a more comprehensive valuation study, the South Carolina
study surveyed businesses in the state and found that 75% of businesses surveyed
reported that that the public library was a contributor to the success of their business
(Barron, et al., 2005). The Urban Libraries Council (2007) also attempted to capture a
sense of indirect benefits from urban libraries and concluded that they are active and
effective partners in economic development, through activities such as early literacy
programs, resources for employment, small businesses, technology access, and training.
Again, this study did not attempt a quantitative value for those activities.
Secondary Economic Effects. Some studies have also attempted to capture
secondary economic effects arising from direct economic benefits. Secondary effects
include such things as the secondary and tertiary impacts of library expenditures for
salaries and materials as they move through the local economy (Imholz & Arns, 2007).
The groundbreaking Florida study (Griffiths, et al., 2004) and the South Carolina
study (Barron, et al., 2005) both used sophisticated econometric models to apply a
multiplier effect to the estimated direct benefits of public libraries in their states. Using
this technique, both studies showed significant positive secondary benefits to their
respective state economies resulting from public library activities. They also both showed
significant returns on taxpayer investment. The Florida study indicated that residents
received a total of $6.54 of value for every dollar of taxpayer funds invested. In addition,
for every dollar of public funds invested in libraries, the gross regional product increased
by $9.08 (Griffiths, et al.). The South Carolina study showed a total return of $4.48 for
each dollar invested, including a conservative estimate of $126 million of secondary
economic benefits to the state economy each year (Barron, et al.).
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Economic Impact. A very broad measure of the economic value of an
organization is economic impact. This measure attempts to determine the incremental
economic activity in a particular geographic area that can be attributed to the activities of
an organization (Holt & Elliott, 2002). Holt and Elliot contended that quantification of
economic impact is not applicable to a public library. They argued that a library is
generally not responsible for bringing significant additional activity or outside funds to
the area; rather its mission is to serve the community in which it resides.
The majority of the library valuation studies to date have not attempted to
quantify economic impact. Notable exceptions include cases where a unique new central
library is expected to be a tourist destination and draw visitors into the area. For example,
the Seattle Public Library study identified $16 million in economic impact to the region
attributable to the new central library in its first year of operation (Berk & Associates,
2005).
Personal Library Use Valuation Calculators
As discussed above, CBA is based on accepted econometrics and is a rigorous
method for deriving library economic benefits. A much more rudimentary method of
expressing library economic benefit is with a personal library use valuation calculator. A
number of state library associations and library districts have developed simple online
calculators that quantify the direct benefits of library services, either to the patron or for
the community overall. The monetary value of the benefits is estimated, based on an
assumed dollar value of market substitutes for library services (Imholz & Arns, 2007).
The calculators are produced on simple downloadable spreadsheets and can be
customized to reflect local economic conditions.
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The Massachusetts Library Association (2004) developed one such calculator.
The Online Value of Public Library Services Tool shows the equivalent market cost for
an individual patron’s usage of library services. Local libraries can adapt the calculator to
their own circumstances and make it available to the community on their website. The
Maine State Library has adapted the Massachusetts tool for use in their state and makes it
available to local libraries on its website (Maine State Library, n.d.).
Imholz and Arns (2007) observed that these calculators are clearly much less
sophisticated than the metrics used in the CBA studies. The calculated benefit is based on
market values that diverge widely from library to library and may not be reasonable.
Nevertheless, they noted that these tools have enjoyed “viral” transmission over the
internet and are finding their way on to a number of public library websites. Evidently,
there is interest at the local level for this kind of information.
Alternate Theories of Value and Debate
The trend toward quantifying library economic value has not been without
controversy or debate. One argument against this trend asserted that the benefits from
public institutions such as libraries do not lend themselves to quantitative, objective
valuation measures and that they do not conform neatly to business models (Buschman,
2005). Similarly, McMenemy (2007) argued that a quantitative measure of economic
value is too narrow, as it fails to value the library’s impact as a complex social force.
Clay and Bangs (2006) acknowledge that quantitative data is important, but argue that the
true value of the library lies in its role as a public good and that this role takes precedence
over the library as an economic force.
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Priestly (2008) argued that a cost-benefit approach takes too short a view. Instead,
she posits that a public library is an investment in future outcomes, similar to corporate
investment in research and development. Rogers (2002) theory of value approached the
issue from a slightly different angle. She argued that doing things well that are not of
value to the community does not create public value. She asserted that to continue to
receive public funding, libraries must create public value.
The research to date on the narrow concept of quantifiable economic value has
substantiated the claim that the library is a good investment for the community. As the
field of library valuation has evolved, there is growing evidence of interest in capturing
broader measures of library benefits and outcomes. The intent of these broader measures
is to express the social as well as the economic benefits from the library (Imholz & Arns,
2007). Some of the methods currently being investigated include outcome based
evaluation (Clay & Bangs 2006; IMLS, 2000; Steffan, 2002), social return on investment
(Clay & Bangs, Imholz & Arns; Olsen & Lingane, 2003) and the Balanced Scorecard
(Imholz & Arns; Matthews, 2004).
Research Opportunities
An extensive search of the literature through the Library, Information Science,
and Technology Abstracts (EBSCO), Library Literature (OCLC), Wilson Select Plus
(OCLC), Emerald Library Suite, ERIC (EBSCO), and General OneFile (GALE)
databases, revealed a lack of empirical research in the field of library economic valuation
in several areas.
There has been little systematic research directed toward the usefulness of
completed valuation studies as advocacy tools. Imholz and Arns (2007) noted that while
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there is some anecdotal evidence of success, it is still relatively early in the development
of the field to expect this type of follow up research. They cited this as an important area
for future study.
There is also limited evidence of research on the applicability of valuation models
to smaller libraries and how smaller libraries may already using them. The bulk of the
literature describes studies conducted at the state level or at large urban libraries.
However, the majority of public libraries in the United States are much smaller. Almost
80% of public libraries in the U.S. serve populations of 25,000 or less (Landau, 2008). It
would be valuable to investigate how smaller libraries can use economic valuation
models and metrics.
There is also limited “how-to” literature and training for library practitioners.
Elliot, Holt, Hayden, and Holt (2007) recently published a book intended to be a guide to
conducting a CBA for practitioners, and this may prove to be a useful tool for individual
libraries. However, the usefulness may be limited by the fact that the book’s intended
audience is libraries with a service area population of 50,000 and over. Prohibitive costs
of a large-scale study and data problems that often exist in smaller systems are cited as
barriers to use in smaller libraries (Elliott, et al.).
The cost of conducting a valuation study has been noted as a barrier to wider use.
Elliott, et al. (2007) estimated that a basic CBA study costs between $15,000 and $20,000
and that would likely be prohibitive for a smaller library. The authors suggest that it may
be more practical for smaller libraries to rely on research conducted at the state level.
Nevertheless, public library missions, activities, and funding are unique to the local level
and this may limit the usefulness of a statewide analysis.
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In contrast, Imholz and Arns (2007) suggested a much smaller cost for a CBA at
the local level. They estimate a cost of $5,000, based on a recent study of local libraries
in Suffolk County, New York. The authors argue that this cost is not excessive, especially
if the results are effectively used to advocate for adequate funding.
Current Study
This study will address a gap in the research by investigating efforts to quantify
library economic value among public library practitioners in New England. It will study
whether public libraries are quantifying their economic value, which models or methods
they employ, and how they use economic outcome data. Practitioner perception of the
importance and effectiveness of economic data will be studied as well the as perceived
barriers to conducting an economic analysis. The New England region is home to the
largest number of libraries per capita of any region in the country and numerous smaller
libraries (Public Agenda, 2006). Studying these smaller libraries may help to provide a
portrait of the extent to which the library valuation research has trickled down to the local
level.
Method
Participants
Eighty-eight public libraries in New England participated in this study.
Participants were selected at random from the total population of 1,294 public library
systems in the six New England states. The names and locations of all public library
systems in the region were obtained from the IMLS public libraries annual survey (IMLS,
2007) and downloaded into an Excel spreadsheet. A simple random sample of 400
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libraries was then selected from the sample frame using the random number generator
function in Excel.
Contact information for each library in the sample was obtained from IMLS data,
state library websites, or from individual library websites. If the email address for the
library director was available, the survey was sent to that address. If not, the general
email address for the library was used. Over 90% of the participants in the study were
library directors. The response rate for the survey was 22%, and the participants represent
6.8% of the total population of New England public libraries.
Research Instrument
The libraries were asked to complete a web-based survey consisting of both open
and closed questions about their use and perceptions of economic valuation measures.
The full survey is shown in Appendix A. All of the libraries were asked to provide
demographic, operating, and financial data. Participants were asked whether they had
used any of six specific measures to quantify the value of their library. If they indicated
that they had, they were then asked a series of open and closed questions concerning their
reasons for using the measures, and their perceptions of the effectiveness of the measures
in meeting their goals.
Libraries that had not used any of the valuation measures were asked a different
series of open and closed questions. These included whether they perceived a need for
ways to quantify the economic value of the library and if this is something they are
considering doing in the future. They were also asked what factors have prevented them
from using these kinds of measures and what methods they currently use to communicate
the value of the library to their community.
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Procedure
The survey was conducted via SurveyMonkey, an online survey website. A cover
letter (see Appendix B) was emailed to each of the 400 libraries in the random sample.
The cover letter contained a link to the web-based survey and participants were asked to
access and complete the survey by clicking on the link. Participants were apprised of the
nature and purpose of the study and confidentiality of responses was assured. To ensure
confidentiality, identifying data was stripped from responses prior to analysis.
Participants were given a two-week period during October of 2008 in which to complete
the survey and were offered a copy of the results if requested. A reminder was sent to
each email address two days prior to the close of the survey.
Results
There are several major findings from this study. Significantly, the majority of
libraries perceive that quantitative measures of economic benefit are important and 67.1%
identify a need for more ways to quantify and communicate the economic value of the
library. This is truer of those who have used economic valuation measures (78.4%) than
those who have not (57.1%).
Just less than half of the participants (45.5%) reported attempting to quantify the
economic value of their library using at least one method. These libraries tend to serve
larger populations, generally perceive quantification of value to be an effective advocacy
tool, and expect to continue using these tools in the future. The remaining libraries
(54.5%) report either that they have not used economic valuation measures (45 libraries)
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or are unsure (3 libraries). On average, this group tends to serve smaller populations and
cites a number of specific barriers currently preventing them from implementing
economic valuation analysis. Both groups of libraries rely heavily on local tax revenues
for funding, receiving a median of over 95% of their funding from local sources.
An examination of the characteristics of libraries that have not attempted to
quantify their economic value indicates several noteworthy traits. As mentioned above,
libraries that serve smaller populations tend to be in this group. Over half of these
libraries (51.1%) serve populations of less than 5,000 and half of those serve populations
of less that 2,000. Overwhelmingly, these libraries are governed as municipal
departments (73.3%), rather than as non-profit organizations. Instead of economic
valuation measures, the majority of these libraries (87.5%) rely on traditional measures
such as circulation statistics, library visits, and program attendance to express the value
of the library to their community. A much smaller group (9.4%) reports that they use
anecdotal evidence for this purpose and 12.5% report not using any methods at all.
It is clear that perceived lack of merit is not the reason that most libraries have not
used economic valuation measures. Only 8.3% report that they do not perceive any value
in calculating these kinds of measures. It is also clear that they would like to be able to
use them. Almost 70% of these libraries state that they are either considering using these
measures in the future (20%) or are unsure whether they will or not (48.9%) The two
measures noted as those most likely to be used are return on investment (56.5%) and cost
benefit analysis (52.2%).
The majority of these libraries (68.8%) cite resource constraints as major barriers
to economic valuation. In particular, time and staffing issues are major concerns. This is
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logical, given that the majority (57.1%) of these libraries operate with five or fewer FTE
employees. In addition, almost half (47.9%) report that they lack the expertise to conduct
a valuation study and over one-third (37.5%) report that lack of user-friendly models or
tools is a deterrent.
The central theme in participant comments is that more time, knowledge, funding
and staffing are required in order for libraries to begin to conduct this type of analysis.
The majority of comments (66.7%) express the need for training, workshops, and
straightforward valuation models. Libraries want a better understanding of the usefulness
and effectiveness of these measures. A representative comment expresses this notion as a
requirement for, “A workshop that demonstrated how I could use these measures easily.
I'd also like to see results from libraries that had adopted these measures to see if they felt
they gained anything by the time invested in calculating the statistics.” A smaller number
of respondents (16.7%) note that while these measures may be useful, their community
does not perceive a need for this kind of analysis and therefore they do not see a reason to
direct scarce resources to it.
In contrast, the 45.5% of libraries that have attempted to quantify economic value
tend to serve larger populations and tend more frequently to be governed as non-profit
organizations. The most typical population range for this group falls between 5,000 and
9,999 (37.8%). Only 27% served populations of less than 5,000 and only 8.1% served
fewer than 2,000. The group is split evenly between non-profit organizations (56.8%) and
municipal libraries (43.2%).
Libraries show a clear preference with regard to the model used to quantify value.
The most commonly used model by a significant margin (64.1%) was the personal library
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use valuation calculator (see Figure 1). The small portion (12.5 %) of libraries that report
calculating the indirect economic impact of the library tend to be larger libraries that
serve populations greater than 20,000.
Libraries generally report that use of economic valuation data is effective in
meeting their goals and that they plan to continue using these methods in the future.
Overwhelmingly, the personal library use calculator is perceived to be effective, with the
majority of participants (81.5%) rating it as either very effective or somewhat effective.
At least 60% of participants rated all other measures as effective (see Figure 2).
Over three quarters of libraries (79.5%) plan to continue to use these measures in
the future. The remainder (20.5%) is not sure whether they will or not. Responses to open
ended questions indicate that the lack of certainty primarily stems from time and staff
constraints and the large amount of time needed to calculate the data.
Libraries use and communicate economic valuation data in a number of ways.
The three most common uses are public relations and marketing (74.4%), data for the
budget approval process (64.1%), and data in the annual report (64.1%). The municipal
libraries are much more likely to use the data in the budget approval process and 81% of
municipal libraries report using the data for that purpose. In contrast, only 30% of the
non-profit libraries used the data in the budget approval process. The non-profits used the
data for public relations (65%), for requests for funding a specific service or material
(40%) and capital campaigns (20%).
Almost half of libraries (41.7%) perceive a need for both quantitative and
qualitative evidence to demonstrate and communicate the value of the library to the
community. Anecdotal evidence of the library’s positive impact on the community or
Quantifying the Economic Value
23
effective partnerships with community organizations are considered important means of
expressing the library’s value. For example, one participant stated,
I feel ambivalent about these kinds of measurements and formulae because I don't
believe that the value of much that I do for my community is quantifiable.
However, the business/accounting mindset prevails in our culture, and therefore it
is important to try to frame all sorts of unquantifiable values in dollars.
Discussion
The results of this study confirm that there is significant interest in economic
outcome data among library practitioners at the local level. Local libraries are beginning
to find ways to quantify economic benefits from their operations and communicate this
data to their communities. Practitioners generally consider the valuation tools effective
and plan to continue to use them in the future. Those that have not used valuation tools
would like to be able to use these tools, but cite resource constraints as the primary
deterrents.
Not surprisingly, the practical and transportable personal library use valuation
calculator has been the preferred model. This validates findings in the literature, that
despite its limitations and lack of analytical rigor, practitioners find it easy to use and
perceive it to be effective. There is strong interest in economic data at the local level,
evidenced by the fact that the use of this type of calculator is spreading throughout the
library community.
Local libraries are finding a variety of ways to publicize economic data and use it
as an effective advocacy tool for funding. The majority of the survey respondents observe
that the data is useful in budget presentations. One participant commented, “This is an
Quantifying the Economic Value
24
important part of asking for funds from the town and during our fund drives. Our patrons
like to see the value they are getting for their dollars.” Another librarian noted, “They
have been effective tools in helping pass our budgets and demonstrating that money spent
on library services brings a positive return on investment.”
Use of economic outcome data in budget presentations is especially prevalent
among municipal libraries (81%). It is noteworthy that the vast majority (73.3%) of
libraries that have not yet used valuation measures are also municipal libraries. This
suggests that there are a significant number of current “non-users” that may also be able
to effectively use economic outcome data at budget approval time. However, there are
specific obstacles to overcome before wider use will be practical or possible for these
libraries.
Lack of resources and limited expertise are both significant problems for smaller
libraries. However, the fact that only 30% are not considering using economic valuation
measures in the future speaks to the fact that they consider them important. One
respondent described the problem this way,
Yes, I think the quantitative methods you described are very valuable. They
would really show that having a good library is an economic benefit to the town.
This is a small library and I never feel that I have enough time to do everything,
but it would be good if I took time to do this kind of analysis. It would show even
further; that the town gets good value from the tax dollars it spends on the library.
Another respondent noted that in order to implement an economic analysis what is
needed is, “Someone with the knowledge of how to do it to come here and do
it...hopefully at no cost to a very small and under-budgeted library.” These obstacles
Quantifying the Economic Value
25
result in the fact that traditional performance measures continue to provide the primary
means of communicating the library’s value to the community.
The results suggest two areas for further investigation. Practitioners need and
want more practical, cost-effective models and metrics to enable them to describe their
economic benefits to their communities. This would likely require an effort at the state or
national level to develop appropriate models. It would be beneficial for academic
researchers, professional organizations, and state libraries to consider conducting
research in this area.
This study also indicates that practitioners need and want information and training
in the use of economic models and metrics. Creation and dissemination of relevant
literature, workshops and online knowledge sharing, would be some of the possible ways
to enable individual practitioners become familiar with these concepts and methods.
Implementation of this recommendation would also likely require additional coordinated
effort on the state or national level.
Libraries provide valuable services to their communities, yet often struggle to
obtain adequate funding. In order to continue to thrive, libraries must find the means to
quantify their significant economic contribution to their community. Together, these two
recommended initiatives will enable more public libraries to advocate for adequate
funding using data based economic evidence. This will be a rich area for future research
and creative solutions.
Quantifying the Economic Value
26
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Quantifying the Economic Value
32
Appendix A
Survey
Section 1
1. Which if any, of the following valuation measures have been used to quantify the
economic value of your library, its services or programs? (Please check all that
apply)
Cost benefit analysis of a library service or program
_______
Cost benefit analysis of a library collection item
_______
Cost benefit analysis of the library overall
_______
Personal library use valuation calculator
_______
Return on taxpayer investment
_______
Calculation of the indirect economic impact
of library expenditures
_______
My library has not used any of theses measures
_______**
**Please skip ahead to Section 2
2. If your library has used any of the above referenced valuation measures, what was
the impetus for doing so? (Please check
all that apply)
To provide data for the budget approval process
_______
To provide data for referenda/bond Issues
_______
To provide data for a capital campaign
_______
To provide data for a request for funding of a
specific program or service
_______
For general public relations and marketing
_______
To satisfy a request from funding agency or a
third party for data
_______
To satisfy a request from a grant maker
_______
Other*
_______
*Please explain other: ___________________________________
Quantifying the Economic Value
33
3. If your library has used any of these valuation measures, what means have you
used to communicate the results with funding agencies and your community?
(Please check all that apply)
Annual Report
_______
Flyers, brochures, bookmarks etc
_______
Press Releases
_______
Website/Blog
_______
Newsletters
_______
Awareness Campaigns
_______
Articles in Professional literature
_______
Conversations with Community Leaders
_______
Other*
_______
*Please explain other: _________________________________
4. If your library has used any of these valuation measures, please rate your
perception of their effectiveness in meeting your objectives:
Measure
Cost Benefit
Analysis
Return on
Investment
Statistic
Personal
Library Use
Valuation
Calculator
Indirect
economic
impact data
Very
effective
Somewhat
effective
Somewhat
ineffective
Not
effective
Not
sure
N/A
Quantifying the Economic Value
34
5. Will your library continue to use these measures in the future?
Yes
______
No
______
Not Sure
______
6. Why or why not?
7. What other method, data, or techniques do you currently use to quantify or
describe the value of your library to funding agencies or the community?
8. Which of these do you consider most effective?
9. Do you perceive a need for more ways to quantify and communicate the economic
value of libraries?
Yes
No
Not Sure
______
______
______
10. Please provide any additional comments you may have:
Please skip ahead to Section 3
Quantifying the Economic Value
35
Section 2
11. If you have not used any of the valuation measures specified in Question 1, what
do you consider the barriers to doing so at your library? (Please check all that
apply)
No perceived value
_______
Time constraints
_______
Financial constraints
_______
Lack of adequate or relevant data
_______
Lack of expertise
_______
Lack of user-friendly models
_______
Other*
_______
*Please explain other: _________________________________________
12. Do you perceive a need for more ways to quantify and communicate the economic
value of libraries?
Yes
No
Not Sure
______
______
______
13. What would enable you to begin to use these kinds of measures?
14. Are you considering using any of these measures in the future?
Yes
No
Not Sure
______
______
______
15. If so, which one(s)? (Please check all that apply)
Cost benefit analysis of a library service or program
_______
Cost benefit analysis of a library collection item
_______
Cost benefit analysis of the library overall
_______
Personal library use valuation calculator
_______
Return on taxpayer investment
_______
Calculation of the indirect economic impact
of library expenditures
_______
Quantifying the Economic Value
36
16. What methods, data, or techniques do you currently use to describe the value of
your library to funding agencies and the community?
17. Which of these do you consider the most effective?
18. Do you perceive a need for more ways to quantify and communicate the economic
value of libraries?
Yes
No
Not Sure
______
______
______
19. Please provide any additional comments you may have:
Please proceed to Section 3
Quantifying the Economic Value
Section 3
Library Characteristics
Governance:
Municipal
Non-Profit Association
Other
_______
_______
_______
Population of legal service area:
Less than 2,000
2,000-4,999
5,000-9,999
10,000-19,999
20,000-39,999
40,000-59,999
Greater than 60,000
_______
_______
_______
_______
_______
_______
_______
Type of service outlet:
Central Library:
Branch:
Total Annual Operating Revenue:
_______
_______
_________
% from local sources
% from State
% from other
_________
_________
_________
Total Annual Operating Expenses:
_________
Collection size:
_________
Total Annual Circulation:
_________
Total Annual Library Visits:
_________
# of FTE employees:
_________
# Of FTE librarians
# Of FTE librarians with MLS
Library has an Endowment fund (Y/N)
Library has a Friends group (Y/N)
_________
_________
_________
_________
37
Quantifying the Economic Value
Respondent Characteristics
I am a:
(Please check one)
Library Director
Librarian with MLS
Librarian
Other
_______
_______
_______
_______
Years of professional experience:
_______
Thank you for taking the time to participate in this survey.
38
Quantifying the Economic Value
39
Appendix B
Cover Letter
Library Science Research Study – Request for Participation
Dear Participant,
I am writing to ask for your participation in a research study concerning use of valuation
measures by public libraries. This research is a required component of the Masters
Program in Library Science at Southern Connecticut State University. I am conducting
this study as part of my graduate coursework in ILS 680 - Evaluation and Research,
under the direction of Dr. Mary Brown.
This is a regional study of public libraries in New England, designed to determine if
public libraries are currently calculating various measures of their economic value and to
ascertain the perceived effectiveness of these measures. This is an evolving area of
interest that has the potential to open new avenues for public library advocacy.
The attached survey will require only a small amount of your time and your participation
in this study is entirely voluntary. All information received from you will be kept strictly
confidential and you will not be identified individually in any way as a result of your
participation in this study. The data collected may be used as part of publications and
papers related to the findings of this study. If you are uncomfortable answering any of the
survey questions for any reason, you may choose not to.
Please complete the survey at your earliest convenience, but no later than October 24,
2008. Return of the survey indicates your consent to have the data you provide included
as a part of the research.
If you have any questions about this study, I can be reached at: csmbristol@cox.net
If you wish to receive a copy of the completed study, please let me know and I will be
glad to provide it to you.
To access the survey, please click on the following link:
http://www.surveymonkey.com/s.aspx?sm=WhCGaZGBG7ahbwbA0xiexg_3d_3d
Thank you in advance for your participation and insight.
Sincerely,
Susan G. Bristol
If you have questions or concerns about this survey, you may also contact the SCSU
Institutional Review Board at (203) 392-5243 or (203) 392-5958.
Quantifying the Economic Value
40
Figure 1
Valuation Measure Used
70
60
Percent
50
40
30
20
10
0
Personal
Library Use
Calculator
ROI
CBA of the
Library
CBA
Program or
Service
CBA
Collection
Item
Indirect
Economic
Impact
Valuation Measure
Figure 1. Percentage of libraries that have used each measure of economic valuation.
Quantifying the Economic Value
41
Figure 2
Effectiveness Rating of Valuation Measures
90
80
70
Percent
60
Effective
50
Not Effective
40
Unsure
30
20
10
0
Personal Library
Use Calculator
Cost Benefit
analysis
Return on
Investment
Indirect
Economic Impact
Valuation Measures
Figure 2. Effectiveness of economic valuation measures as perceived by libraries that
have used one or more of these measures.