Rational choice and valuation of public libraries

Abstract

While sophisticated economic models are well-established for determining the value of non-market goods, there has been some question as to whether there may be problems connected with using these methods for determining the value of public libraries. The background to these economic models is reviewed, noting that the two major preconditions that must be fulfilled are that the method must be compatible with the presupposition of rationality, and it must be able to capture non-use values of public libraries and values not related to the immediate pursuit of individual self interest in ways which are compatible with the presupposition of rationality. The validity of these preconditions for public libraries is discussed, noting that the questions fall into three main problem areas: whether it is possible to define rational behaviour as a wider concept, including behaviour not motivated by the pursuit of self interest, whether this wider definition fits with the assumptions of ‘behavioural’ economic models, or whether the models need to be revised for a wider definition, and whether or not the methods currently available are valid for the purpose in hand. A brief presentation of the theory of rational choice is presented, followed by an examination of the concepts underlying the assumptions of individuals as economic agents seeking to maximize their utility. It is concluded that three conditions must be fulfilled for non-market methods to be useful with regard to public library valuation: they must be able to measure non-use values as well as use values, they must be capable of integrating valuation motives which extend beyond the pursuit of individual self interest, and they must not violate the assumption of rationality. Among the methods for valuing non-market goods, the contingent valuation method seems to fulfil these conditions and should, therefore, be tested in a public library context.