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Research on the Economic Value of Public Libraries - Review of New Research Articles on the Value of Libraries

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If you see an research article on the direct or indirect value of libraries, which is not reviewed here, please send me a citation and I will review it. Also, if you see reviews of any of these articles, we can add a link to them. Send to George Morse at morse001@umn.edu.


Library’s Benefits to Patrons and Impact on Property Values

Thornburgh, David. The economic value of the free library in Philadelphia. Fels Institute of Government, 2010.

This study, conducted by the Fels Research & Consulting, University of Pennsylvania, uses an interesting approach to measure the benefits to patrons and the impact of libraries on property values.

Library’s Impact on Literacy

The authors used two novel approaches for measuring the economic impact of literacy: 1) the use value of children’s books, programs aimed directly at teaching literacy and online programs for English as a second language. And 2) the percentage of patrons learning to read due to the library.

Using the first approach, the library estimated these literacy programs had a value of $21.8 million.

The survey of library patrons found that 10% of the respondents reported they could not have learned to read without the Free Library and another 13% reported they could not have helped others learn to read without the library.

Strengths of the Literacy Impact Estimate

The $21.8 estimation method is a standard one used by economists in benefit/cost and reflects a conservative estimate of the value to the patrons.   It also has the merit of being something that every library can use because it relies on data that libraries already collect. To estimate the value libraries can use the “use value calculator” available from their state library or the American Library Association. http://www.ala.org/advocacy/advleg/advocacyuniversity/toolkit/makingthecase/library_calculator

As detailed in the report, the 10% estimate is a conservative estimate since it uses the entire sample rather the higher values from some sub-sets. The approach of asking for direct attribution by patrons rather than asking librarians is a useful one.

Weakness of the Literacy Impact Estimate

The $21.8 million estimate is what some economists call the private value, i.e. the value to those directly in the library program. It does not capture the indirect benefits which flow to the others in society (lower costs for remedial reading education in schools, higher incomes leading to lower social support costs and to higher tax payments, better local economies, higher local property values due to citizens better able to adapt to a changing economy and culture, etc.).   Since most of the benefits of the $21.8 million accrue to a small group of patrons, some voters might support libraries if they understood the nature of these indirect or spillover benefits.

The report does not describe the characteristics of the 10% who reported the library was essential to their becoming literate. Where they children, adult immigrants learning English, or others? This additional information would help readers see if the results are applicable to their libraries.  

These impacts are based on a survey of 3,971 library patrons using online surveys which were posted on the library website and had paper copies at the libraries. Another important set of results were based on interviews with 17 librarians and 33 patrons.   The report provides no discussion of how representative this sample is the total population of library patrons.

Workforce and Business Development

The authors used the survey results to estimate that 1 percent of the users found new jobs and that 8 percent of the library users started or grew their businesses as a result of library use. Their estimates of economic value is based on the value of use of library materials related to these areas, with $6 million for workforce development and $3.8 for business development. The estimation methods are similar to literacy and share the same strengths and weaknesses.

While the survey work probably cannot be done easily by many libraries, the estimates of the use value could be.

Library’s Impact on Property Values

The study uses data on arm-length market sales of homes to explore how their values change with proximity to the library or a library branch. Almost all homes in Philadelphia are no more than a mile from the Free Library with the median being 0.51 miles.

Regression analysis was used to control for some other variables which influence home values (proximity to downtown, parks, retail, and other amenities. Regression analysis shows the portion of change in home values correlated with proximity to the libraries, holding constant these other factors. Homes within one-quarter of a mile were 7.7% higher than comparable homes further away from the libraries. Homes from one-quarter to one-half mile were also higher but only 0.5 percent higher.

Strengths of the Property Value Analysis

The use of regression analysis makes this much stronger than studies that look only at the distance from the library without including other home value determinants.

Weaknesses of the Property Value Analysis

Unfortunately, the authors do not provide the full list of the variables which are in the regression analysis, along with the statistical results. Without this detail it is impossible to evaluate the strength of the regression analysis. This report gives too little detail for the study to be replicated, a critical aspect of good science. This does not mean that it is poor science but rather that it is impossible to clearly judge it as using a strong scientific method. This might be why this important study has not been published in a peer-review journal.

A practical limitation of this analysis that in most communities residents are not as close to libraries as in Philadelphia. If there is no, or very small, impact on property values beyond one-quarter miles from the library, the results have the opposite implication as those highlighted here.   Actually, having strong libraries might increase the property value of all homes, even while being closer to the library does it more. This aspect was not tested and cannot be tested with the Philadelphia data because almost no homes are further than one mile from a library.


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