Victoria has 44 public library services, which are run by municipalities - including 14 delivered by regional
corporations, contracted to deliver services by multiple local government authorities in a partnership
arrangement. In 2009 these public library services operated from 286 service points attracting 27 million
in-person visits plus more than 30 million virtual visits via their websites.(1) 48% of Victoria's residents are
registered members of a public library.
In recent decades, the majority of funding for library services has been provided by local government,
whereas in the 1980s library funding was split almost equally between state and local government. As a
result, local governments are feeling funding pressure, as they negotiate and balance competing
community funding demands.
The ‘Libraries Building Communities' project (an initiative of the State Library of Victoria and the Public
Libraries Victoria Network) generated valuable information to qualitatively articulate the community
contributions made by Victorian public libraries. But until recently library stakeholders could find little
information within the Victorian context to quantify these benefits or easily apply them in their efforts to
bid for funding. Interstate and international studies (2) have tried to place a value on public library services,
but they mostly focus on quantifying (in dollar terms) the direct economic benefit enjoyed by library users;
treating broader benefits as ‘intangibles' and rarely quantifying them. In reality, the total value of public
libraries encompasses the direct and indirect benefits derived by users, as well as the benefits derived
by the wider community including non-users.
Recently, State Library of Victoria and Public Libraries Victoria network released "Dollars, Sense and
Public Libraries", a report by SGS Economics and Planning which has closed this gap, finding that
Victorian public libraries contribute significantly to community welfare. Not only that, but the benefits
contributed by public libraries significantly outweigh their provisioning costs. This represents a sound
return on community investment and provides a compelling case for further investment. The research has
also found that the economic activity induced by Victorian public libraries in Victoria is significant after
accounting for all of the multiple rounds of transactions induced by library related expenditures.
Previous research showed that two forms of analysis can help value public libraries. The first analyses the
net contribution public libraries make to community welfare. This contribution is measured via a cost benefit
assessment framework, which contrasts the economic, social and environmental costs and benefits
associated with public library services, enabling a holistic estimate of net benefit to be derived. CBA is the
preferred tool of Australian Governments for assessing whether a proposed investment is worthwhile, taking
into account economic, social and environmental considerations.
Secondly, it is helpful to analyse the economic activity induced in the local economy by public library
operations. This activity is measured by an economic impact assessment framework, which identifies the
stimuli that public libraries introduce into local economies through their expenditure profiles, and subsequently
traces how these stimuli culminate in economic activity in buyer and supplier industries through successive
rounds of transactions.
The study applied both these frameworks to value Victorian public libraries, using a rigorous process that
measured the benefits using three economic techniques, drawing from a survey of more than 1,000 Victorian
households, on-line surveys of more than 1,300 public library users, as well as case study investigations of
seven public library services across Victoria.
The Cost Benefit Analysis
The costs of public libraries are clearly defined and available via their recurrent capital and operating costs.
This information is readily available from the Annual Survey of Public Library Services in Victoria published
by Department of Planning and Community Development. The benefits of public libraries are wide ranging
and encompass the value delivered to library users directly and indirectly, including:
• The services and programs made available to users by public libraries;
• The social interaction facilitated in public libraries;
• The sense of place and enhanced local amenity afforded by libraries;
• Environmental savings generated through continued reuse of library collections;
• Public library contribution to language and computer literacy; and
• Public library facilitation of improved education, career development and health outcomes.
Non-users of public libraries also gain benefits from public library services. These include the value non-users
place on having the option to use public libraries in future, as well as the value of knowing that public libraries
exist for others to use, both now and in future.
Measuring the benefits of public libraries is not as straightforward as measuring costs, because the benefits
are enjoyed by both users and non-users, and are not traded in the market place as they are largely provided
free of charge. Consequently, market prices do not exist. To overcome this, the project used a combination
of three non-market valuation techniques, which provide alternative estimates of benefit for the sake of
comparison when viewed individually.
The Financial Savings method values the services offered by public libraries by asking users to estimate the
costs they would incur if similar services were provided by substitute, private sector providers. The Travel Costs
method estimates the value of time, cost and effort that library users incur in getting to and in using public
library services. In essence this method assumes that the value derived by users must outweigh the costs
incurred, otherwise users wouldn't make the visit. The Contingency Valuation method asks library users and
non-users how much they would be willing to pay to keep public library services on offer in their respective
To estimate user benefits, the study investigated seven case study library services, with online user surveys
collected at each. The case studies were chosen to represent inner (established) and outer (growth) urban
areas, regional locations, disadvantaged geographic areas, areas serviced by single municipality versus
regional corporation-delivered services. They included Casey-Cardinia Library Corporation, Darebin Libraries,
Eastern Regional Libraries, Gannawarra Library Service, Geelong Regional Library Corporation, Latrobe City
Libraries, and Wyndham Library Service. To estimate the non-user benefits, a random and representative
household survey across all of Victoria was administered.
Each of the remaining 38 public library services in Victoria was aligned with one of the seven case studies,
and the applicable dollar value per user and non-user estimate was applied to each library's respective user
populations. The statewide non-user survey results, i.e. the nonuser willingness to pay, were applied across
all Victorian households. This enabled an annual net dollar benefit for the Victorian community to be generated.
Economic Impact Assessment Framework
The EIA framework isolates the stimulus that public libraries bring to their local economies and traces how this
stimulus flows through to other enterprises in the local economy via multiple rounds of transactions. Public
libraries stimulate their local economies through their recurrent capital and operating costs, as well as library
user spending that is triggered by their use of public library services. This information was gathered from the
Annual Survey of Public Library Services in Victoria plus the online and paper surveys of case study library
users mentioned earlier.
To trace how this stimulus flows through local economies, the project developed case study area-specific
econometric models, which enable industry specific income, value added and employment multipliers to be
generated for each library service. Summing the operation of these multipliers found the total amount of
economic activity, in terms of case study area income, value added and employment, that is linked to the
public library services in question.
To scale the economic impact analysis up to state level, the recurrent costs of all public library services
were sourced from existing publications, as per the CBA. Additional user-based stimulatory expenditures
were assessed from the case studies on a per user basis and subsequently applied to total user numbers
across the state. These stimulatory expenditures were input into a Victorian econometric model to assess
the indirect impacts, enabling an assessment of economic activity generated in Victoria by public libraries.
• 67% of Victorians identify themselves as members of public libraries. • 63% of Victorian households have
used a public library in the past 12 months.
• According to both users and non-users of public libraries, the best thing about public libraries is that they
offer a wide variety of resources and information, and, very importantly, that these services are provided
free of charge.
• Library users and non-users highlighted that public libraries helped with meaningful pastimes, lifelong
learning, finding information, and feeling part of the community. They noted the library provides a safe
and pleasant place to meet, encourages socially responsible behaviour and provides internet/ computer
access for all.
• Both users and non-users acknowledge that public libraries provide clear community benefits. Perhaps
most telling is that non-users stated that they were willing to pay significant amounts for public library
services given these community benefits. Indeed non-users stated that they were prepared to pay
$55 per annum to continue public library services, compared with library user willingness to pay $73
• More than 80% of library users and non-users clearly stated that they would be willing to pay more but
did not have the capacity to pay more for public library services.
• Library users estimated that if public library services were provided by private providers on a fee for service
basis, they would have to spend between $360 and $420 per annum to get a similar level of service. And
many users do not have the capacity to fund these additional expenditures.
• The delivery costs of public libraries in Victoria is estimated to be $191 million per annum. The value of
community benefits derived from public libraries is estimated at $681 million per annum. That is, the
benefits of public libraries outweigh the costs 3.6 times over.
• Public libraries contribute significantly to their local economies and to the Victorian economy. If the
economic stimuli associated with Victorian public libraries (i.e. own expenditure plus triggered customer
expenditure) are traced throughout the Victorian economy, we find that each year, public library services
contribute $722 million to Victorian Income, $120 million in Victorian value-added or Gross State Product
(GSP), and support the provision of 4,430 full time equivalent jobs.
• Users of public libraries are generally satisfied with library services. Where suggestions for improvement
were forthcoming, they largely revolved around improving and deepening existing library services.
The "Dollars and Sense: Community Value of Public Libraries" research has provided public library managers
with tools for assessing the value of specific library services, and advocacy materials to inform future funding
decisions. It also helps to demystify the economics surrounding social/ community facilities and provides a
basis to transfer thinking behind the modelling to other forms of social infrastructure.
Footnotes and references
1. Department of Planning and Community Development Annual Survey of Public Library Services in Victoria
2008-09. Local Government Victoria, Melbourne 2010
2. in places including New South Wales, Indiana, Ohio, Washington, Wisconsin and Britain
Liddle J, Enriching Communities: The value of public libraries in New South Wales. Library Council of New South
Wales Sydney 2008
SGS Economics and Planning, Dollars, Sense and Public Libraries: Technical Report. State Library of Victoria
and Public Libraries Victoria Network, 2011
accessible online at http://www.slv.vic.gov.au/sites/default/files/dollars-sensepublic- libraries-technical-report-part1_0.pdf
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