Table Of ContentAMERICAN LIBRARY ASSOCIATION
Chicago 2007
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Library of Congress Cataloging-in-Publication Data
Measuring your library’s value : how to do a cost-benefi t analysis for your public library / Donald S.
Elliott ... [et al.].
p. cm.
Includes bibliographical references and index.
ISBN 0-8389-0923-X (alk. paper)
1. Public libraries—United States—Cost effectiveness—Handbooks, manuals, etc. 2. Public
libraries—Cost effectiveness—Handbooks, manuals, etc. 3. Public libraries—United States—
Evaluation—Handbooks, manuals, etc. 4. Public libraries—Evaluation—Handbooks, manuals,
etc. I. Elliott, Donald S.
Z731.M367 2007
025.1—dc22 2006019911
Copyright © 2007 by the American Library Association. All rights reserved except those which may be
granted by Sections 107 and 108 of the Copyright Revision Act of 1976.
ISBN-10: 0-8389-0923-X
ISBN-13: 978-0-8389-0923-2
Printed in the United States of America
11 10 09 08 07 5 4 3 2 1
We dedicate this book in memoriam to our mothers—
Margaret Louise Elliott, Helen Schrader Holt,
and
Elizabeth Donovan Edmonds.
Our mothers recognized the benefi ts of teaching their children
to enjoy reading and libraries long before we set out on a decade
of research to measure such benefi ts.
Our research is but a small part of their legacy.
Dr. Donald S. Elliott
Dr. Glen E. Holt
Dr. Leslie Edmonds Holt
(cid:2)
I dedicate this book to my wife and children,
who have provided inspiration and support
in our life’s adventures.
Dr. Sterling W. Hayden
CONTENTS
ACKNOWLEDGMENTS VII
1 Introduction to Cost-Benefi t Analysis for Public Libraries 1
2 Fundamentals of Cost-Benefi t Analysis 9
3 Important Considerations before Commissioning a CBA Study 28
4 Preparing to Measure Benefi ts 40
5 Measuring Library Benefi ts: Identifying and Sampling
Library Users 54
6 Measuring Library Benefi ts: Preparing the Survey Instruments 69
7 Measuring Library Costs 89
8 Measuring Return to Taxpayer and Donor Investment
in the Library 99
9 Wrapping Up Your Study: Communicating Your CBA Findings 111
10 Conclusions: Evaluating What Your CBA Study Accomplished 117
APPENDIXES
A Measuring Consumer Surplus by Contingent Purchases
of Substitutes: A Technical Appendix for Economists 125
B Sampling Cardholders 127
C Survey Instruments 132
D Calculating and Reporting Survey Response Rates 159
E Technical Insights for Project Consultants 166
GLOSSARY 175
INDEX 177
v
ACKNOWLEDGMENTS
WE THANK PLA, AND PARTICULARLY GEORGE NEEDHAM, NOW A VICE
president at OCLC but formerly PLA’s executive director, who encouraged us to ask
for the critical funding that started this project. His encouragement and PLA’s grant
led to the pilot study at St. Louis Public Library and provided the experience we
needed to launch the larger project.
We thank the Institute for Museum and Library Serv ices and its staff for the two
major grants that made the research for this project possible and for working with us
to produce and test a tool that libraries can employ effectively.
We thank the St. Louis Public Library’s board of directors, the staff, and its users.
The library served as an alpha- and beta-site subject for our early research on cost-
benefi t analysis. Its directors, staff, and users offered criticism that helped us to refi ne
our methodology. They also encouraged us in our work to measure and reveal the
dollar value in their library’s serv ices.
We thank the directors and staff members of the thirteen libraries that aided
us in the completion of our site studies. We especially thank the computer and data-
processing staff at each of those institutions. They helped us process the patron records
to create the databases that made our research possible.
We thank the many friends and colleagues from Southern Illinois University Ed-
wardsville who supported our research. The university’s Institute for Urban Research
provided an academic home for our projects and conducted surveys used in two of the
funded research projects. Professors Ralph Giacobbe and John Navin of the School
of Business contributed to the design of survey instruments and databases used in our
early research. Several graduate students from the Department of Economics and Fi-
nance, especially Christopher Dussold, Jullavut Kittiakarasakun, and Amonia Moore,
assisted with literature searches, focus groups, empirical testing, and programming at
different stages of our research.
Finally, we owe special thanks to Anne Watts, now manager of Machacek Branch
in the St. Louis Public Library system. Anne provided invaluable assistance in help-
ing us select good research sites and in devising and critiquing our initial research
methodology.
vii
CHAPTER 1
Introduction
to Cost-Benefi t Analysis
for Public Libraries
PURPOSE OF THIS BOOK
If you are reading this book, you have more than a casual interest in determining the
value of your library’s ser vice to its users. This book is designed for you. It is a how-
to manual for those who want to prepare a statistical estimate of the benefi ts of their
library’s serv ices to its customers.
Why do library professionals want to document the dollar value of their library’s
ser vices? They want to make a strong case for their library. They want strong, convinc-
ing evidence to communicate the value of their library to government offi cials, board
members, and donors. As one director exclaimed after seeing the result of his library’s
study, “Now we have a great sound bite!”
The libraries that participated in our demonstration studies found they could
learn other important policy information as well. For example, cost-benefi t analysis
(CBA) can match the cost of a serv ice with benefi ts from that serv ice—in total and
distributed across different user groups. It can show how ongoing users benefi t from
traditional serv ices, like book checkouts, while the library gains new users from recent
ser vice innovations such as library computers and electronic databases. Understand-
ing your customer base and its evolution is good business in any business, and libraries
are no exception.
A couple of libraries used their demonstration study results to change staff train-
ing. One library, for example, dramatically increased the institution’s in-serv ice train-
ing budget because “investment in staff improvements would be seen immediately in
increased benefi ts to users.” Another director used the results to “Let . . . Staff Know
1
