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BULLET Placing a Value on Public Library Services
by
Glen E. Holt, Donald Elliott, and Amonia Moore
HOW THE METHODOLOGY WAS TESTED

Inevitably the calculation of direct benefits had to involve an extensive user survey. The preparation for and carrying out of the survey involved many steps.

Consumer Surplus Valuation of Services: Pricing Market Substitutes for Library Services

The focus groups also helped the researchers test the accuracy of the prices the research team established for individual library services. In completing the Service/User Matrix, the research team finally settled on 15 services to ask about in the telephone survey. Those 15 services were: children’s books, adult books, videos/films, audio/music, magazines, newspapers, toys, parent-teacher materials, reference and research services, special events, craft & activity programs, social skills/etiquette training, computer skills training, encyclopedias, and, finally, dictionaries and almanacs.

Implementation of the consumer-surplus methodology requires measuring library usage of each service and contrasting that usage with hypothetical purchases of similar services at market prices. The pricing of market alternatives to library services required considerable research. Whenever possible, the research team used published prices of comparable items or services available from other providers. For books, the values came from a source like the Bowker Annual. That publication became the basis of assigning a value of $8.00 to the purchase of each children's book and $14.00 for the purchase of each book that an adult patron would have purchased if borrowing privileges were not available.7

Some library activities, like special events (author lectures, which the library and area bookstores provide free, and children's storytime, which also is provided free by several area bookstores) were valued at zero because researchers simply could not find any way to set a reasonable price. Remember that the intent in this project was to price everything conservatively. Replicating the SLPL research for other libraries operating under different cost situations undoubtedly will result in the pricing for some services which were given zero values in the SLPL CBA case study.

The hardest library service to price – and as it turned out, the most critical - was “Reference and Research Services, including Readers’ Advisory.” After much time on the telephone calling both within the region and to other cities throughout the middle part of the United States, the research team priced this service conservatively at $50 per hour.

In the discussions which library professionals have had with Dr. Holt during his many presentations on the CBA project, only one person has objected to this $50 per hour figure - because that person's hourly salary was lower than $50 per hour. The objection misses the point. In St. Louis and in larger cities throughout the middle United States, $50 is a conservative figure. When this CBA study is replicated in smaller libraries, the value of substitutes for staff time can be valued higher or lower depending on local or regional circumstances. Moreover, the study method is to ascertain the benefits that users perceive they derive from a service. Users may perceive service benefits as lower, higher or the same as the costs of providing them. In short, service prices can and should be adjusted to fit individual institutions. A listing of the prices of all library services included in the SLPL Services Valuation study, and the source of the price, can be found in Table 2 below.

Table 2. Pricing of Services for the General User Survey

Service Substitute Price Source
Children’s books (paperback) Bookstore 8.00 Bowker Annual (1995)
Books for adults (paperback) Bookstore 14.00 Bowker Annual (1995)
Videos/films Video rental 3.25 Blockbuster Video
Audio/music Audio purchase 13.00 WalMart
Magazines Newsstand 2.95 World News Ltd.
Newspapers Newsstand 0.50 World News Ltd.
Toys Education resource store 15.00 Parent-Teacher Tools
Parent-teacher materials Education resource store 5.00 Parent-Teacher Tools
Reference & research services Information broker services 50.00/hr. Burwell Enterprises—Houston
Special events Cultural center 9.00 Center for Contemporary Art
Craft & activity programs YMCA 1.00/hr. YMCA School Age Child Care
Social skills/etiquette training YMCA 1.00/hr. YMCA School Age Child Care
Computer services Telecommunity center Free U. of Mo.—St. Louis
Adult education St. Louis Public Schools Free Community Education Program
Family or parenting programs St. Louis Public Schools Free Community Education Program
Storytelling programs Bookstore Free Library Ltd.
Meeting space St. Louis Public Schools Free Community Education Program
Encyclopedias Purchase encyclopedias (prorate over 10 yrs.) 995 for one set Encyclopedia Brittanica,Inc.
Dictionaries and almanacs Bookstore 5.00 WalMart


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