Valuation is a necessary element in the cost-benefit analysis policymakers employ to select public projects which favour economic performance. In the information field[1], we have struggled to demonstrate the value and true impact of our services, and welcome non-market valuation as a formal measurement. However, these services cannot be simply compared to NHS or environmental resources, despite the same method used, because people tend to prioritise the immediate essentials for life. Beyond competing in value with other public goods, libraries, museums and archives are also competitively and separately evaluated. Unfortunately, archives have displayed the least economic impact. This paper will begin with the exploration of non-market valuation used in our field to provide necessary knowledge for further discussion. It will go on to point out what factor causes unfavourable results and palpable consequences of using non-market valuation in the long term. Finally, I will explain my current research and findings, which may offer an alternative valuation for archives.
Thus far, two non-market valuation techniques have been employed: contingent valuation, and economic impact. Contingent valuation is concerned with revealing the exchange value in an individuals’ mind by using a questionnaire to build a hypothetical market. The mean of derived value is multiplied with the population related to the subject. Two main questions are usually applied in this process: willingness-to-pay (WTP) to measure use value, and willingness-to-accept (WTA) to measure non-use value. Users will be asked how much they would pay to support the service, whereas non-users will be asked how much compensation they need in exchange for discontinuing the service. For example, the British Library[2] and Bolton study[3] show that non-use value[4] must be included to demonstrate high return on the investment. This could be an unsustainable claim, as non-use value means very little to current economy, the primary government’s concern.
Economic impact is an implication of economic value based on the assumption that people would pay the cost to access a service, if they consider it worthwhile enough. The study will focus on user consumption: for example, transportation, accommodation and nutrition. The average expenditure is then multiplied by the user number, yielding the final value.
Both valuation methods have one drawback, if applied to archives: the number of users. As a key multiplier, a large population could guarantee a high return. Therefore, archives will always show the smallest return when compared with libraries and museums. The volume of population depends on the capacity of the service. For contingent valuation, a national institution could include the national population, whereas a local institution could be eligible to include the city population. Willingness-to-pay tends to depend on household income and local economic prosperity. Rich people tend to pay more than the poor. Willingness-to-accept is subject to dispute as it includes the chance that people can gain money: so the results may be exaggerated. For economic impact, the low number of users will consequently limit consumption by default. Normal people have three meals per day, one seat per trip and one bed per night. While marketing strategy has been introduced to archives, it is insufficient to boost the value.
If the valuation continues, particularly contingent valuation, famous institutions will maintain or grow their financial support. This is because contingent valuation emphasizes how people recognise and value the service. The famous can offer exhibitions, activities, new collections and facilities, which seems to please users. If funders decide on this aspect of value, the funding will be concentrated, flowing to big institutions more, but less to the infamous. In this vein, the result in a new cycle of valuation can be predicted: famous institutions located in prosperous areas will yield the highest return.
I, then, attempt to find an alternative method, which excludes the number of users in the valuing calculation and focuses on the usage of our services. This idea is based on Sullivan[5], Hubbard[6] and Ataman[7]. They guide convincingly that a neutral way to value archives can be done by the market where real consumption occurs, as shown in the following model.
Figure 1: The economic valuation framework for archives
Traditionally, archives are not a popular place, where strict rules are applied to ensure accessibility in the long term. However, if we look into the marketplace, we can see many cultural products use archives as a reliable source, for instance, documentaries. The economic value of archives depends on how users make them meaningful. Hence, it is possible to demonstrate economic value, when we look outside an institution’s walls. Finally, I would like to introduce input-output analysis, an economic tool to display demand among industries. Unfortunately, in current analyses, archives are recognised as non-market goods, where the link to production is missing. From now on, we will focus on economic valuation through a market force, with no more non-market valuation.
Lertchai Wasananikornkulchai, University of Glasgow
[1] Here I mean libraries, museums and archives.
[2] Caroline Pung, Ann Clarke and Laurie Patten, ‘Measuring the Economic Impact of the British Library’, New Review of Academic Librarianship, 10 (2004), 79–102 <http://dx.doi.org/10.1080/13614530412331296826>; Andrew Tessler, Economic Valuation of the British Library (Oxford Economics, 2013) <http://www.bl.uk/aboutus/stratpolprog/increasingvalue/britishlibrary_economicevaluation.pdf>.
[3] Jura Consultants, ‘Bolton’s Museum, Library and Archive Services: An Economic Valuation’, Bolton, UK, 2005.
[4] Non-use value means the value in other aspects except current use, for instance, future use or indirect use such as an emotional impact of the existence. For further detail, please read David Throsby, Economics and Culture (Cambridge University Press, 2000).
[5] Patrick H. Sullivan, Value-Driven Intellectual Capital: How to Convert Intangible Corporate Assets into Market Value, Intellectual Capital Series (New York, N.Y.) (New York ; Chichester: Wiley, 2000).
[6] Douglas W. Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business, 2nd Edition edition (Hoboken, N.J: John Wiley & Sons, 2010).
[7] Bekir Kemal Ataman, ‘Archives Mean Money: How to Make the Most of Archives for Public Relations Purposes—The Yapi Kredi Bank Example’, American Archivist, 72 (2009), 197–213.
[…] years. Demonstrating the value and impact of archives can be hard to evidence – it’s been suggested that the economic value of archives depends on how users make them meaningful. And the sector has […]