Measuring outcomes: applying cost-benefit analysis to middle-sized and smaller public libraries - Public Libraries

* The results of the cost-benefit study are very valuable to the library in its external public relations. The study quantifies the library's value to the community in a manner that is persuasive to external audiences such as local governments, donors and foundations, and taxpayers.

* The concept of the return on taxpayer investment that is part of the study implicitly incorporates the opportunity to assess the benefits of private-public financial partnerships. Private-sector gift-and-grant programs magnify library service benefits to local patrons beyond those paid for by taxes.

*In some cases, participation in the cost-benefit study may cause the library to reevaluate the effectiveness of its practices in maintaining its cardholder database. Unless cardholding records are updated annually, they do not reflect the library's actual user membership.

The applicability of the proposed methodology to other educational and cultural institutions is an open question. The central building blocks of the methodology all appear to be applicable to other publicly supported institutions, such as museums or performance arts organizations. The use of a matrix to display mission as an array of services versus subgroups of users is appropriate to a variety of public service venues. Contingent valuation as a means of estimating benefits is also widely applicable. The use of consumer surplus is more problematic, as there may not be readily available market substitutes for services of some public institutions. Return on taxpayer investment and return on invested capital are easily applied to almost any publicly supported institution. Nevertheless, the project's first purpose is to refine and demonstrate the methodology in the context of mid-sized and smaller libraries. The methodology may be extended at a later date to serve other institutions, including museums and historical societies.

Steps in Project Research

Each step of the CBA II work plan outlined below follows the project's research objectives:

1) Construct matrices of patrons and services for each participating library based on the library's mission. In meetings with the administrative staffs of each of the nine test-site libraries, the researchers will facilitate the classification of library services and patrons into major categories.

2) Consolidate the matrices from the nine libraries into a common framework. Staff from each of the libraries will critique the common framework to ensure its applicability to each of the individual libraries.

3) Design survey instruments, develop interviewing software, and select samples of library patrons to estimate benefits for each of the libraries by using measures of consumer surplus and contingent valuation (WTP). Since the research plan replicates many elements of the large-library study, a comparison of consistency in measuring bigger and smaller systems can be accomplished.

4) Ensure compliance with human-subject guidelines. All research will be conducted in conformity with Federal guidelines for human subject research as applied by the Human Subjects Research Committee at Southern Illinois University at Edwardsville; in compliance with all appropriate state laws protecting the privacy of library transactions; and the highest standards for user privacy articulated in the principles documents of the American Library Association.