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Calculating the benefits from Public Library Services.

Dr Glen Holt, Executive Director of the St Louis Public Library, St Louis, Missouri, visited the State Library of NSW in September 1998. Dr Holt reported on the findings of a cost benefit analysis carried out over a three year period in the St Louis Public Library.

The aim of his research was to find out how valuable the library service is to constituents by measuring the direct return on annual taxpayer investment. The study found that users get at least $4.00 worth of benefits for every $1.00 spent.

The research was conducted using cost benefit analysis methods, and measured two kinds of values:

1. Direct benefits, ie the benefit or value to the user

2. Indirect benefits, ie benefits to society as a whole.

It is hard to get a handle on societal benefits. For example, a value has been costed for the benefit of a child being able to read, and another value for a child with literacy skills -- but how much, or what percentage, can the library claim of this value? Dr Holt did not include these indirect benefits in his analysis of the study.

A survey was used to ascertain:

a) Consumer Surplus (the value that consumers place on the consumption of a good or service in excess of what they must pay for it). Users were asked about how many library services they used, how many books borrowed, how many books they buy, and what alternatives they would employ if there was no library service. Special effort was placed on valuing reference/research/reader's advisory services. These services showed the greatest consumer surplus as they are not offered by alternative sources. The study showed that "everyone wants a personal librarian". Generally, cost benefits were shown to be higher for book users than computer users. The high cost of computers influenced this outcome -- it is thought this figure will change as the price of hardware and software comes down. The study found that for every $1 spent, users were receiving $3 worth of service.

b) Contingency Valuation. Respondents were asked how much money they would need in compensation if public libraries were to be closed. If compensation was to be paid in the form of an annual tax relief, the average figure accepted was $60 per household. This figure would cost the community 9 times more than the existing library service. 88% of respondents would not vote in favour of closing a library service.

c) Opportunity/Time Costs. Based on the fact that library users exert, effort and spend time to use library services, researchers reason that the value users place on library services must be at least as great as their sacrifice in accessing and using the services. Taking into account income and the value of employed user's time, the researchers found a benefit to users of $6 for every $1 paid in taxes.

The goal of this study is to produce a handbook that will allow all public libraries to measure services in this way.

Susan Campbell Manager, Administrative Services Burwood-Drummoyne Public Library
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Author:Campbell, Susan
Publication:Australasian Public Libraries and Information Services
Geographic Code:8AUNS
Date:Sep 1, 1999
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