The Public Library as Economic Engine: Texas Public Libraries--Economic Benefits and Return on Investment, The University of Texas Bureau of Business Research and IC2 Institute, December 2012

This is the third in our series of posts "The Public Library as Economic Engine."  

This post presents a study of public libraries in Texas conducted by the University of Texas at Austin Bureau of Business Research and its IC2 Institute for the state's Library Commission.  We have picked it for several reasons:

• It is a rigorously performed cost-benefit analysis of the economic effects of libraries with the complete methodology laid out and conservatively applied by the authors. 
• At over 200 pages long, it provides case studies of literally dozens of community libraries across Texas showing the general consistency of results independent of size, demographics, economics, etc. 
• It was conducted in a state that couldn't be more different politically than Northern Virginia and Fairfax County in particular; a state whose political focus is on private enterprise, not public spending.  Yet this report clearly reinforces the value of public investment in public libraries.
• It may be the most comprehensive post-Great Recession examination of the economic value of public libraries in print.

Here is the report's full Executive Summary: 

Executive Summary

Public libraries in the State of Texas provide significant economic benefits for their communities. This report examines these economic benefits, and documents those activities which contribute to economic activities throughout all regions of Texas. In 2011 Texas public libraries collectively were found to provide $2.407 billion in benefits while costing less than $0.545 billion, a return on investment of $4.42 for each dollar invested.

A data-intensive research design was developed to quantify economic benefits.  Extensive data from the Texas State Library and Archives Commission (TSLAC) were used in conjunction with the input-output economic modeling software, IMPLAN. Additional data and information from a survey of all Texas public library directors were used as inputs to the economic model.

Based on the IMPLAN model, which analyzed public libraries purely as business and organizational entities, libraries produced $1.043 billion in local economic activity.  Further, in 2011 more than 12,000 jobs in Texas were dependent on public library expenditures.

Another major component of the quantitative analysis examined services offered by most public libraries in Texas:

• circulation of books and other media;

• access to public computers and Internet;

• educational programs; and

• reference services.

Economic estimates were derived for these four services as well as for volunteers at public libraries and wireless usage.  A conservative approach was utilized that yields much greater certainty in the estimated services values. The total value of these six public library services was conservatively estimated at $1.364 billion. These values combined with the benefits of local economic activity ($1.043 billion) produce a total return on investment of $2.407 billion.

While the identifiable economic benefits are significant, public libraries’ economic impacts are far greater than we can estimate as many economic benefits are difficult to quantify. Case profiles were developed about specific libraries’ activities with business organizations and assistance to self-employed individuals, entrepreneurs, small businesses, employees, and employers. Many  of the 40 case profiles illustrate a public library’s significant role for job seekers, job training, and workforce development.

Others highlight unique and innovative service approaches or ongoing collaborations with Chambers of Commerce. These examples describe the widespread, unmeasured economic impacts of public libraries of all sizes and in all types of locations (rural, suburban, and major metropolitan areas) in Texas.

A second set of profiles focuses on economic impact estimates for 14 individual libraries.  Four of these libraries serve fewer than 10,000 residents, seven serve between 10,000 and 500,000 residents, and three serve more than 500,000 residents.  Several of these libraries have significant capital programs underway, and there are substantial differences among the libraries regarding the proportion of purchasing that occurs locally.  Nonetheless, all of the libraries generate substantial positive returns-on- investment for their communities and cities.

Total economic benefits from Texas’ public libraries in 2011 were approximately $2.407 billion. With expenditures of $544.9 million, there was an ROI of $4.42—for every dollar invested, there was $4.42 in verifiable local economic activity. The Texas ratio compares favorably to results in prior studies of other states and cities, given the conservative approaches used in this analysis.

Yet the impacts of Texas’ public libraries continue to be underestimated. No benefits have been included in this analysis for the numerous, specific examples in which libraries have enabled business organizations, businesses, and self-employed individuals to improve their economic activities or the value of libraries’ activities that have assisted individuals to obtain employment. Nor were we able to include monetary values for the contributions of Texas libraries to a more educated workforce and higher quality of life, both of which are vital for sustained economic development.

For those who wish the read the full 224-page report (7MB), it may be downloaded by clicking here. 

Anytime Fairfax County can get a better than 4:1 return on its investment of public funds, it really ought to do so in this time of county economic stagnation.  Instead, we find the County Board of Supervisors continuing to cut the Fairfax County Public Library budget, staff, and collection year after year.  How short-sighted can they be.