WHAT IS CONTINGENT VALUATION METHODOLOGY?

Contingent valuation (CV) is a means of discovering the economic value of non-market goods. It was originally developed to assess the value of environmental protection services. The CV method asks respondents to answer a survey about the valuation of a public good. A description of the service is presented and respondents are asked to state how much that service is valued in a hypothetical market. This is usually assessed in two ways – how much the respondent is willing to pay (WTP) to keep the service, and how much the respondent is willing to accept in compensation (WTA) were the service to be discontinued or negatively altered in some way (Ventura, Reference Ventura2005; Aabo, Reference Aabø2005; Chung, Reference Chung2007).

CONTINGENT VALUATION AND LIBRARIES

The CV method has a broad and fairly extensive history in determining the economic value of libraries, a traditionally free service. A number of studies have been published which use this methodology. The CV method has been used to justify and demonstrate the continued value of public libraries especially in straightened economic times. The cost-benefit features of this evaluation methodology allow us to see how far the economic costs are outweighed by the economic (and societal) benefits of free library services.

Some examples of CVM in practice: in 1999, an exercise was performed in the US at the James Cabell Library at the Virginia Commonwealth University – it found that the value of the current hours of the reference desk exceeded the cost by a ratio of 3.5:1 (Harless and Allen, Reference Harless and Allen1999); in 2001, a variation of the CV survey was used in various libraries in New Zealand, including the parliamentary library – it found that library services had a value of between two and twenty times their annual budget (MacEachern, Reference MacEachern2001). In 2005, a contingent valuation study was carried out for Norwegian public libraries. This study was apparently the first in the world to assess the value of a whole library system and survey designers targeted a representative sample of the Norwegian population of 2 million households; 999 persons were interviewed in their homes by a professional opinion company and questions were framed around preferences for the municipal budget – for example would you be willing to maintain the local library service if the alternative was to close down the library and transfer any budget savings to another local service. The results of the survey found that the benefits of public libraries were four times their costs (Aabo, Reference Aabø2005). In 2007, a survey to assess the economic value of the KDI School library in Seoul, South Korea, was carried out, evaluating various services through the benefit-cost lens finding that the library's physical resources were 2.44 in terms of benefit-to-cost ratio (Chung, Reference Chung2007). In 2011/12, the British Library undertook a major survey to evaluate its economic value, using a benefits-cost analysis via contingent valuation. It found that for every £1 invested in the library, it generated £4.90 in economic welfare (Tessler, 2013). Other studies have looked at the value of national libraries in Korea (Kwak and Yoo, Reference Kwak and Yoo2012); assessing the economic value of a regional public library in Australia (Hider, Reference Hider2008); the value of hospital libraries to clinical and research staff in China (Yao and Ren, Reference Yao, Hui-ling and Qin2016); measuring the value of Iranian academic libraries (Seifouri, et. al., 2018)

One of the key takeaways from these studies is to provide survey questions which allow for a mix of WTP and WTA answers – these can be averaged out to discover a more accurate economic value to even out any inevitable biases.

Interestingly, there is very little in the literature that uses CVM to assess the economic value of legal libraries or information services in the corporate sector in the UK or Ireland. In 2015, the American Association of Law Libraries (AALL) published an informative and detailed ‘white paper’ on the economic value of law libraries which aimed to provide best practice to library managers to determine the standards of value that can be measured and reported; something that would be useful in the UK and Ireland.

MIDDLE TEMPLE LIBRARY'S CONTINGENT VALUATION SURVEY

The survey questions were formulated after a review of the literature (detailed above), and consisted of 27 questions, including questions which asked how members rated certain services as well as those questions which directly asked how, in monetary terms, library services are valued. Before it was disseminated to all members, the survey was tested on three barristers at different stages of their career, e.g. under five years’ call, post-five years’ call, and a senior QC. The survey took on average nine minutes to complete, but most respondents completed it within five minutes. The completion rate was 94%, but some respondents did skip questions. The survey was posted on our website, and promoted through social media and the Inn's e-newsletters. Print copies were available in the library to complete. Flyers with a QR code linked to the survey were distributed to the local sets of chambers. The survey ran for two months, in September and October and we received 177 responses, which represents a low response rate.

The survey included background questions, such as membership status, and how often respondents accessed the library, and allowed for ‘other’ throughout. The survey included a section for additional feedback, which provided some useful insights into additional services that we could provide to members. Many of the comments from this section also focused on the library's collection of previous editions, which are retained for point-in-time research and are a crucial resource at all four Inns of Court libraries.

The overwhelming majority of respondents were barristers in chambers, who made up 44% of respondents. Students and employed barristers each represented 12%; non-practicing barristers were 9%; pupils and judges were each 7%; retired members were 6%; solo practitioners were 3%; 2% of respondents preferred not to give their status.

We asked four direct questions which asked respondents to provide a monetary value on having, or not having, access to library services.

9. By using the Library to access the above services, how much money do you estimate you save over the course of the year – e.g. not having to buy books, subscribe to a specialist database, etc.

£0  £200  £500  £700  £1000  £2000  £5000 £10,000

Other (please indicate) Don't know

Data from this answer showed that respondents on average saved £1279 per year.

We asked two questions to elicit an alternative cost per respondent were they not to have access to the library – the first of these asked how much they would expect to pay to use alternatives to the library

10. How much do you think it would it cost on an annual basis to use alternatives to the Library? For example, the Institute of Advanced Legal Studies charges individual practitioners £320 per annum, excluding access to most of its commercial databases and the borrowing of books. Choose from the following ranges.

£0  £100  £300   £500  £700  £1000  £2000  £5000

Other (please indicate) Don't know

The average here was £1053.75. This question was left open to interpretation – the alternative cost could entail using another Inn library, and therefore fairly negligible, but could encompass a time cost in travelling to another library, paying for access to IALS, using a document delivery service or paying for the resource themselves. The next alternative cost question asked respondents how much they think they would personally need to contribute to establish a comprehensive library service in their own organisation.

11. How much do you think it would cost you to contribute to the foundation of a comprehensive library and information centre in your chambers or organization on a yearly basis?

£500  £1000  £2000  £3000  £5000  £10,000  £20,000

Other (please indicate): Don't know Prefer not to answer

The average figure here was £3877.19. The question elicited wide range of responses from the unrealistically low to upwards of £20,000.

We also asked questions which aimed to elicit a willingness to accept compensation (WTA) response by asking if a value could be placed on not having access to the library – in other words, how much they would expect to be compensated in a scenario whereby the library no longer existed. The figure calculated here was £2005.48. As can been seen from these questions, we used a mix of the WTP and WTA we already saw in CV surveys.

We had planned on attempting to place an economic value on time saved by having access to the library, so we included a question asking respondents to estimate how much time they saved per visit to the library – this figure was 2 hours and 12 minutes.

Some of what we were unable to do, at this stage at least:

• • Extrapolate from these averages an overall economic value. This was difficult to ascertain due to various factors – a lack of useable usage data that reflected statistics such as frequency of use per member; do we use the numbers that reflect the overall membership of the Inn or data regarding the Inn's tenants who pay rent towards their workplace accommodation.

• • Unable to place a value on time because of the nature of individual barrister's hourly earnings; sensitive commercial factors precluded us from retrieving reliable data on this point.

• • Other Inns of Court members who use the library frequently, or who would place a value on library services, were underrepresented in the survey.

SUGGESTIONS FOR ENHANCING EVALUATION TOOLS

As a result of some of the weaknesses noted above, and notwithstanding the fact that carrying out the survey was both useful and intersting, we can reflect that this method of evaluation might not be suitable for this type of library, or that questions should have been framed in other ways. Now that we have the data, we can adjust the formulae in the future to better reflect the reality of how the library is used. Linked to this, carrying out the survey itself was a valuable learning exercise which will aid us when we carry out future methods of evaluating library services.

One of the main demerits of using CV in evaluating library services is that respondents will not necessarily tell the truth, or have the requisite knowledge to offer accurate values (Lee, Chung and Jung, 2010). This can work both ways – respondents can over-estimate how much they think they should be compensated, and can also over-value the amount they would contribute because it is seen as morally and culturally worthwhile to contribute to library and other similar services. Another point to bear in mind is not all services can be monetised (Tessler, 2013), and using this valuation tool can skew what people expect from libraries and the services they offer. To offset this, a multi-criteria analysis (MCA) can be offered alongside CV. Tessler defines MCA as: “assessing the attributes of a given scheme or initiative in terms which are important to defined stakeholders.” (p.57). This level of analysis was included in the survey, and can be used in the future planning and assessment of library services, as well as to communicate the worth of the service to senior stakeholders.

A further method of evaluation, which can be used to supplement the CV survey and MCA, would be to use focus groups as a ‘streamlined and inexpensive way to gather information about customers’ perceptions of library services.’ (Hernon, Altman and Dugan, 2015, p.117). Open-ended feedback would allow the library to ascertain ideas which might hitherto have been neglected. Pre-selection of participants allows for finding out how different user-groups view the library, including non-users. There are difficulties in interpreting this kind of feedback though, but if it is used as a supplement to more data-driven analysis a more well-rounded picture can be achieved.