Are public libraries efficient? Evaluating scale economies of public libraries in the U.S. with a cost function approach

Abstract

Public libraries are important informational, cultural, social, and educational institutions. Although the research has shown their significant presence, value, and effectiveness in providing services for their communities, there is the persistent questioning of value and efficiency of public libraries by some, which leads to continuous and severe funding cuts for public libraries. This study addresses the efficiency issue of public libraries. The previous research on this issue is inconclusive because of deficiencies in methodologies, such as the use of circulation as the single measure for library outputs while ignoring all other library services. This study applies a well-established cost function with multiple output measures to over 1600 public libraries in the United States. This study concludes that public libraries as a whole operate efficiently and argues for sustained and continuous funding for public libraries.