The public value of a national library: Results of a contingent valuation survey

Abstract

As a public library, a public good, provides many external benefits for the community it belongs to, its public value needs to be carefully assessed. More specifically, the Korean Government demands information on the public value that ensues from the establishment of the Gwangju branch of the National Library. This paper therefore attempts to measure its public value by using the contingent valuation method and reporting the results of the contingent valuation survey. We adopted a strategy to use two split samples for on-site and off-site areas, which refer to one area surrounding the library and another that does not, respectively, and as such, the study focuses on the scale parameter of the contingent valuation model. The estimated value for the scale parameter is statistically significant at the 1% level. The statistical test of the hypothesis that the mean willingness to pay estimate for the on-site area is not different from that for the off-site requires estimating the mean willingness to pay separately for each area. The mean willingness to pay estimates for the on-site and off-site area are KRW 3330.5 (GBP 1.7) and KRW 3572.9 (GBP 1.8) per household per year, respectively. The national value expanded to relevant residents is about KRW 60bn (GBP 30m) annually for five years. The results are expected to be useful for policy makers in determining the economic feasibility of the branch.