Placing a Value on Public Library Services|
Glen E. Holt, Donald Elliott, and Amonia Moore
COST-BENEFIT ANALYSIS: THE TOOL TO MEASURE LIBRARY BENEFITS
CBA Estimates Two Different Benefits
CBA involves estimating two different kinds of benefits.
Direct benefits. First, CBA measures the “direct value” to those who use or who have access to the services being measured. Economic scholars recognize a number of methods to determine the direct value of services. The SLPL study used three different ways to assess the direct benefits of library services. Each is explained later in this paper. Most, however, measure only a direct-benefits relationship: The library provided a set of reading and information materials and services directly to its users. Those users benefited directly from those services. Hence, they received direct benefits.
Indirect (third-party or societal) benefits. The second part of determining value in cost-benefit analysis is when economic researchers estimate “the indirect benefits” or “societal benefits” from the services being studied. These are the benefits that third parties or the population as a whole derive when individuals use the services of a public institution.
Library services implicitly yield indirect benefits. When users get the help they need (e.g., the information to start a business, help in learning to read, or the material for an important speech to a community organization), society benefits indirectly. These indirect benefits accumulate when a new business hires unemployed or underemployed residents, when children grow up to become literate voters and productive workers, and when the community leader is successful in getting a bill passed that stabilizes a community's neighborhoods.
To sum up, libraries, in carrying out the social mission for which they were chartered, provide users with services from which those users receive direct benefits. And, because good things happen to others in the community because citizens use the library's services, the whole society benefits indirectly from the library's operations. Since the opening of the first publicly-supported library in 1833, public librarians, library boards of directors, local government officials, and philanthropists from Andrew Carnegie to Bill Gates have recognized that these two sets of benefits - direct and indirect - flow from public library services.3 This easy fit with the library's ongoing relationship with its users and its community makes CBA an ideal tool to measure both the direct and indirect benefits of library services.