Abstract

The return on public library investment can best be determined through what is known as contingent valuation. This economic method of evaluation for non-priced goods and services looks at the implications of not having the goods/services. This study considers the implications of not having public libraries. It includes the added cost to use alternatives sources of information, should people choose to do so (also called net benefit); the portion of direct economic contribution public libraries make to their communities that would be lost; and the portion of economic benefits to the library users that would be lost. Those who use public libraries also invest their time, travel expenses, etc., to use the libraries. This individual investment is a discretionary one and can be considered an indication of the value that users place on their libraries. The user investment in 2003/2004 is significant at $1.72 billion, nearly four times the investment from all other sources together. The total cost to use alternatives to the public libraries is estimated to be $4.05 billion, based on asking library users whether they would use alternatives and, if so, what would be the likely cost to use them. Depending on the specific purpose or type of use, they would use an alternative for 74 percent-97 percent of the uses, and they knew which sources they would use for 36 percent-90 percent of the uses. For the known alternatives, users estimated the time and other expenditures that would be needed to use those alternatives. The total net benefit (added cost to use alternatives) is $2.33 billion.8 In addition to the fact that it would cost more to use alternatives to the public libraries, if there were no public libraries, the employees of the libraries would not receive compensation and unemployment would increase (at least for some time). The total lost compensation for library staff is $241 million. Direct in-state expenditures by the public libraries for books, periodicals, electronic equipment and resources, etc., as well as capital projects (construction, renovation, etc.) would not be made, thereby reducing revenues to those Florida businesses. This lost expenditure totals $105 million. Finally, there would be detrimental effects on community economic benefits if the public libraries did not exist. The lost community economic benefits include the elimination of library spending with non-library entities in the community and state, such as with vendors, contractors, etc. In the case of vendors operating within libraries (copying, gift shops, coffee shops, etc.) and near the libraries (restaurants, shops, coffee shops, etc.), some shift in spending patterns and, thus revenue generation, would occur. A study conducted in the U.K. identified that approximately 23 percent of these halo expenditures would not occur if the libraries were unavailable.9 Assuming the same pattern of reduced expenditure if Florida libraries were unavailable, the pass through spending and halo spending would reduce by $195,000 and $101 million, respectively. These lost community benefits total $447 million,10 but the effect of this loss multiplies into a much greater economic loss to the communities and the state as a whole. If vendors and contractors, etc., experience a reduction in revenues, there will be fewer employees, lower expenditures and lower tax receipts. Similarly, if library employees were no longer employed, they would pay lower taxes, spend less in the community, and cause further detrimental effects on community businesses and the state. If the public libraries ceased to exist, the user community would be faced with finding information and materials from other sources, as referred to above. Depending on the specific purpose of use, they would not bother to find and use an alternative. The proportion of uses for which no alternative would be sought are relatively low, ranging from 3 percent for both educational and work-related uses to 13 percent for personal information uses and 26 percent for recreational. However, these uses resulted in direct economic benefits to the users (use benefits) when public libraries were used; these benefits would be lost if there were no public libraries. The estimated lost use benefits amount to $155 million. This estimate is derived only for those uses where users indicated they would not seek an alternative. The uses for which users would want to use

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