Contingent Valuation in Public and Academic Libraries

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Contingent Valuation in Public and Academic
Libraries

• Sarah E. Aerni
• and
• Donald W. King
• ARL Library Assessment Conference,
  Charlottesville, VA
• September 2006

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Definition of Contingent Valuation

• Contingent Valuation is an economic method used
  to assess the benefits of non-priced goods and
  services (e.g., libraries or specific library
  services) by examining the implication of not
  having the product or service.

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2 Ways weve used Contingent Valuation

• (1) Determine the value of a library system to
  its surrounding local community (i.e., ROI of PA
  public libraries).
• (2) Establish the value of a particular service
  provided by the library to the parent
  organization (i.e., Cost/Benefit analysis for the
  University of Pittsburgh journal collection)

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Type 1 Conducting a Return on Investment Study
for a Community Public Libraries in Pennsylvania
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Study Methods PA Public Libraries

• Household telephone interviews (1,128
  interviews)
• In-library survey of visitors (2,609 responses)
• Survey of organizations that use public libraries
  (226 responses)
• Follow-up survey of public libraries (129
  responses)
• REMI state input-output economic model
• State Library statistics

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Household Telephone Interviews of Adults PA
Public Libraries

• Random digit dialing
• Post-stratified by age and sex
• Universe depends on estimates made
• Adults
• Visits and remote access
• Demographics of users
• Visits
• Services used
• Purposes of visit
• Consequences of use
• Time and Cost to use library
• Time and Cost to use alternatives
• Households
• Household purchases in nearby community
• Household income
• Strengths and weaknesses

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In-Library Survey of Visitors

• Instruments handed out at designated times by
  staff.
• Both central and branch libraries were involved.
• Universe is Visits.
• Any estimate based on number of visitors must be
  adjusted.
• Principal observations
• - Services used
• - Purpose of visit
• - Importance and outcomes of information use
• - Time and cost to use the library
• - Time and cost to use alternatives
• - Other activities as part of trip
• - Demographics

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Example of Contingent Value Questions from PA
User Survey

• If there were no public library, what would you
  do to obtain the information on this visit?
• __ I would not bother to do anything.
• __ I need the information, but do not know where
  else to go.
• __ I would use another source gt

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Contingent Value Questions from PA User Survey

• How much time and money do you think it would
  take to use the alternative source?
• How far would you have had to travel to use this
  other source?
• Please estimate the additional costs of using
  this other source. This includes renting or
  buying it, or any other costs such as parking,
  public transportation and any other expenses.

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Methods Cost of Users Time

• For the general population, estimating the costs
  of users time is complicated.
• We asked about purpose for using the library on
  the last visit (1) Recreational (2) Personal
  (3) Educational- as students or as teachers (4)
  Work (not teachers).
• From the demographics section of the survey, we
  calculated average salary levels (hourly) for
  each group.

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Source Taxpayer Return on Investment in
Pennsylvania Public Libraries, to be released in
January 2007.
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Top Ten Services Used by Adults
Source Taxpayer Return on Investment in
Pennsylvania Public Libraries, to be released in
January 2007.
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Benefits of Having PA Public Libraries

• Benefits to Users
• Users would have to pay much more in their time
  and/or money to obtain needed information
• Users would miss valuable information because
  they wouldnt know where else to go to obtain it.
  The value of this information would be lost.
• Organization users would have to pay more to
  obtain needed information.

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Benefits of Having PA Public Libraries

• Economic Benefits to the State
• Library salaries and wages contribute to
  communities.
• Expenditures on in-state products and services
  add to the economy.
• Revenue to in-library shops, etc. run by vendors
  contributes to the economy.
• Many visits to libraries involve other activities
  such as shopping, going to restaurants, coffee
  shops, etc. Some revenue to these services is
  attributable to trips to the library.

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Results Benefits of Having PA Public Libraries

• Net benefits to user (959 million)
• Net benefits to organization users
• (5 million)
• Value of needed information that might be lost
  (84 million)
• Salaries and wages contributed (180 million)

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Results Benefits of Having PA Public Libraries
(Contd)

• In-state expenditures added to economy (68
  million)
• Revenue to in-library shops (1 million)
• Revenue to nearby businesses and services
  attributed to library use (80 million)
• Total Return-on-Investment (1,377 million)

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Results Ratio of Taxpayer Return on Investment
in PA Public Libraries

• Return-on-Investment (ROI) 1,377 million
• Taxpayer Investment 249 million
• Ratio of ROI to taxpayer investment
• 5.5 to 1

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Type 2 Demonstrating Value of a particular
service An Academic Library Journal Collection
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Methods Academic Library Surveys

• Journal readership study sent to University
  faculty and staff.
• From a statistical standpoint, the amount of
  reading and demographics are treated as a simple
  random sample. The faculty survey yielded 209
  responses out of 1,725 full-time instructional
  faculty.

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Methods Academic Library Surveys

• Surveys mailed to all faculty via campus mail
  reminders sent out a few weeks later.
• The study was publicized by the library, and
  results were sent to faculty afterwards as
  thanks.
• Universe is visits.
• Observations include
• Number of articles read
• Method used to identify journals and format used
  for reading
• Consequences of use
• Time and cost to use
• Time and cost of alternatives
• Demographics

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Contingent Value Questions from Academic Library
Survey

• For responses in which the last article read was
  obtained from the library or by the library
• - Thinking back to the source of the article,
  where would you obtain the information if that
  source were not available?
• (1) I would not bother getting the information.
• (2) I would obtain the information from another
  source (Please specify source).

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Contingent Value Questions from Academic Library
Survey

• If you would use an alternate source to the
  library
• In order to obtain the same information, I
  would expect to spend ____ minutes or time and/or
  _____ dollars. (If the answer is zero, please
  enter 0 instead of leaving blank).

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Methods Cost of Users Time

• For university faculty, we use the average
  faculty salary plus an amount for University
  overhead.
• From another study, we estimate that university
  faculty average about 2,200 hours of work per
  year.
• This allows us to calculate an hourly rate per
  hour for faculty.

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Results The value of an Academic Journal
Collection

• Benefits to users Faculty would require 250,000
  more hours, i.e., 114 FTEs, and an additional
  2.1 million to use alternative sources if the
  library journal collection were not available.
  We estimate this value to be 13.48 million.

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Results The value of an Academic Journal
Collection

• Benefits to the Institution The institution
  benefits from the presence of the library, but
  these benefits must be lowered by the costs of
  creating and maintaining the current collection.
• - Costs of faculty using library
• collection 1.56 million
• - Costs of purchasing and providing
• the collection 1.87 million
• Benefits 13.48 mil - 3.43 mil 11.61 million

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Results The value of an Academic Journal
Collection

• If there were no university library journal
  collection, it would cost the university about
  4.38 times the cost of the current library
  collection in faculty time and other expenditures
  for the same amount of research and information
  gathering to be carried out.

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Sarah Aerni

• Research Assistant, University of North Carolina
  at Chapel Hill
• MLS from University of Pittsburgh, 2002
• aerni_at_email.unc.edu