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Economies of scale and governance of library systems: evidence from West Virginia

Economics of Governance volume 20, pages 237–253 (2019)Cite this article

Abstract

Public libraries are a billion dollar industry in the United States. We explore the institutional determinants of public library technical efficiency using data from West Virginia. We first document considerable cross-district variation in library efficiency. While the average library district in our sample is between 81 and 90% efficient depending upon the year and measure, there are many district-years that are under 50%. We then explain our technical efficiency measures as a function of institutional variables reflecting the type of district and sources of funding. We find consistent evidence that urban libraries are more inefficient, perhaps because they are too small to achieve sufficient economies-of-scale in production of library services. In addition, we find revenue from local sources is associated with reduced efficiency, contrary to what would be predicted by local public goods producer theory.

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Fig. 1

Notes

  1. Blau (2011), Warburton (2013), Smith (2015), Kelley (2015), Davis (2015), Stepleton (2015), Woods (2015) and Cleaver (2015) are non exhaustive examples.

  2. Willes (2016) and Gazette (2016).

  3. One reason to look within states, like we do with West Virginia, is that technical efficiency is a relative measure and the institutional constraints and funding methods vary so much across political jurisdictions that comparing Hawaii to West Virginia can be problematic.

  4. We also calculate the TE using a constant return to scale assumption, and use it to identify the libraries operating under increasing returns to scale and the scale efficiency. It is interesting that no library operates under decreasing returns to scale.

  5. Library programs are services provided to its patrons. For instance, children’s programs usually focus on education-related programs such as reading groups and activities or science programs, and entertainment programs like crafting and gaming programs. Adult programs, on the other hand, often focus on book activities, development of skills such as coding, and job search services. For more detail on these programs visit http://www.ala.org/alsc/kickstart and http://www.ala.org/tools/atoz/adultservices/adult_lib_svcs.

  6. West Virginia Library Commission (2013) lists seven different types of public library governing authorities. We count anything that is not a county commission or a municipality as multi-jurisdictional. For example, the six joint County/Municipality library systems are counted as multi-jurisdictional, as are the nine Board of Education/County/Municipality governed library systems.

  7. Special laws are laws initiated locally and passed by the Legislature. These laws set aside part of the tax dollars from local government (Board of Education, County or City) to public libraries. Some of special laws have been in place since 1930s and the most recent is from 1994. However, since 2013 it is no longer a mandatory that Board of Educations to continue providing funding to public libraries. For more on these special laws, see West Virginia Library Commission (2013).

  8. All city libraries are, by definition, smaller in area—but maybe not population—than county or multi-jurisdictional libraries.

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Authors and Affiliations

  1. Department of Economics, West Virginia University, PO Box 6025, Morgantown, WV, 26506, USA

    Amir B. Ferreira Neto & Joshua C. Hall

Authors
  1. Amir B. Ferreira Neto
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  2. Joshua C. Hall
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Corresponding author

Correspondence to Amir B. Ferreira Neto.

Appendix 1: Average TE by library

Appendix 1: Average TE by library

Name

Gov

AvgTE

Name

Gov

AvgTE

Alderson

CI

0.90

Moundsville-Marshall County

MJ

1.00

Belington

CI

0.93

Mountaintop

MJ

0.66

Bolivar-Harpers Ferry

MJ

0.84

New Martinsville

CI

0.71

Boone-Madison

MJ

0.88

Nitro

CI

0.95

Bridgeport

CI

1.00

Nutter Fort

CI

0.45

Brooke County

CO

0.87

Ohio County

CO

1.00

Buffalo Creek Memorial

CI

0.85

Paden City

CI

0.77

Burnsville

CI

0.85

Parkersburg/Wood Co.

MJ

1.00

Cabell County

MJ

1.00

Paw Paw

CI

0.75

Calhoun County

CO

0.80

Pendleton County

CO

0.89

Capon Bridge

CI

0.75

Peterstown

CI

0.91

Chapmanville

CI

0.85

Philippi

CI

0.79

Charles W. Gibson

CI

1.00

Piedmont

CI

0.94

Clarksburg-Harrison Co.

MJ

0.99

Pine Grove

CI

0.83

Clay County

CO

0.91

Pioneer Memorial

CO

0.85

Cowen

CI

0.92

Pleasants County

CO

0.71

Craft Memorial

CI

1.00

Pocahontas County Free

CO

1.00

Craigsville

CO

0.97

Princeton

CI

0.95

Doddridge County

CO

0.50

Putnam County

CO

1.00

Dora Bee Woodyard Memorial

CO

0.51

Rainelle

CI

0.86

Elkins-Randolph

MJ

1.00

Raleigh County

MJ

1.00

Fayette County

CO

1.00

Richwood

CI

0.75

Five Rivers

CI

0.56

Ritchie County

CO

1.00

Gassaway

CI

0.92

Roane County

CO

1.00

Gilmer

CI

0.76

Ronceverte

CI

0.68

Grant County

CO

0.54

Rupert

CI

0.89

Greenbrier County

CI

1.00

Shepherdstown

CI

1.00

Hamlin-Lincoln County

CI

0.92

Sistersville

MJ

0.82

Hampshire County

CO

1.00

South Charleston

CI

1.00

Hardy County

MJ

0.76

South Jefferson

CO

0.99

Helvetia

CO

0.90

Southern Area

CI

0.90

Hundred

MJ

1.00

Summers County

CO

0.88

Jackson County

CO

1.00

Summersville

CI

0.80

Kanawha County

CO

1.00

Sutton

CI

0.89

Keyser-Mineral County

MJ

0.94

Swaney Memorial

CI

0.57

Kingwood

CI

0.90

Taylor County

MJ

0.86

Logan Area

CO

0.83

Terra Alta

CI

1.00

Louis Bennett

CO

1.00

Tygart Valley

CI

0.61

Lowe

CI

0.57

Tyler County

CI

0.73

Lynn Murray Memorial

CI

0.87

Upshur County

CO

0.84

Marion County

MJ

1.00

Valley Head

CO

0.79

Martinsburg-Berkeley Co.

CI

0.94

Vienna

MJ

0.86

Mary H. Weir

CI

0.38

War

CI

0.94

Mason County

CO

0.82

Wayne County

CO

1.00

Mcdowell

CI

1.00

Webster-Addison

MJ

0.75

Mingo County

CO

1.00

White Sulphur Springs

CI

0.83

Monroe County

CO

0.84

Williamson

CI

0.55

Morgan County

CO

0.72

Wyoming County

CO

1.00

Morgantown

CI

1.00

   

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Ferreira Neto, A.B., Hall, J.C. Economies of scale and governance of library systems: evidence from West Virginia. Econ Gov 20, 237–253 (2019). https://doi.org/10.1007/s10101-018-0215-2

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Keywords

  • Data envelopment analysis
  • Efficiency
  • Government
  • Public libraries

JEL Classification

  • H41
  • H76
  • I29