The Christian County Library recently sought to calculate the value its users and community receive for the money invested in the library. The library used a methodology set out by a study of libraries in Colorado, discussed here. What we calculated was that the Christian County Library returns $3.40 in value for every $1.00 spent. Should voters decide to expand library facilities and resources by approving the tax levy renewal on the August 8th, 2017 ballot, the return on investment would grow as resources, number of employees, usage, and facilities grow. Here’s how library administrators calculated the library’s ROI (return on investment).
Christian County Library Return on Investment
This study follows a model of contingent valuation that has been used in similar studies to determine ROI for public libraries. Contingent valuation is an economic technique often used for the valuation of nonmarket resources. This figure was calculated by examining the ramifications of not having a public library for the communities served. It includes:
- Cost to Use Alternatives: The estimated amount of money that would have been spent using an alternative information source.
- Lost Use: The estimated value of the lost information for users who would not have tried to attain the information elsewhere.
- Direct Local Expenditures: Contributions made by the library to community businesses and individuals in the form of purchasing goods and services.
- Compensation for Library Staff: Library staff would not receive compensation and unemployment would be a factor for at least some period of time.
- Halo Spending: Purchases made by library users from vendors and business that are located close to the library. A recent study found that approximately 23 percent of these purchases would not occur if the library did not exist.
|Cost to Use Alternative||$2,390,149|
|Direct Local Expenditures||$24,074|
|Compensation for Library Staff||$582,500|
|$3.40 for $1.00|