valuing archives | dcdc14
TRANSCRIPT
Valuing Archives
From non-market valuation
to input-output analysis
Lertchai WasananikornkulchaiThe Humanities Advanced Technology and Information Institute (HATII)
• Why is valuing archives important?
– Private funders may support our service due to intimacy.
– Government, as the primary funder, aims at the efficient
allocation of resources (taxation).
– Many forms of threat from government
• Privatisation
• The reduction of public debt (a.k.a. cuts)
– Thus, it is necessary to convey our value to the funder.
1
2
Posted on 30
September 2014
“The main advantage of estimating the
benefits of preservation in monetary terms is
that these can be compared with the costs of
preservation to determine whether any given
project or policy is worthwhile, or indeed to
choose among competing projects for the
allocation of funds.”– Mourato, S., Pearce, D., Ozdemiroglu, E. and Howarth, A. (2000) ‘Beyond
“dusty archives”: The economic benefits of preserving recorded heritage’,
Cultural Trends, 10(39), pp. 85–116.
3
• Economists calculate our value by using contingent
valuation (CV)
– Set up a question concerning willingness-to-pay, or
willingness-to-accept.
– Sample about 500 participants to ensure the reliability.
– Multiply the average of value by the size of population.
• Contingent valuation can measure
– Use value
– Non-use value (future use, bequest value, existence value,
etc.)
4
• The British Library (2013)
• Bolton Archives (2005)
5
• The British Library:
– Multi-approaches to the economic value.
– Claimed the total benefit of £527.3 m, Benefit-cost ratio
equivalent to 5.1, or every £1 invested in BL could generate
£5.1 in the welfare economic framework.
– Non-use value accounted for £424.9 m, or about 78% of
total value.
– The average value (716 participants) was multiplied by U.K.
population aged 16 and over (50,653,848).
6
• Bolton Archives:
– The study purely employed contingent valuation, without
other approaches.
– Claimed the total benefit of £280,000, the benefit cost ratio
was 1.12.
– The total benefit comprised use value and non-use value.
– Use value was worth £204,000, generated by 9,293 users.
– Non-use value was worth £76,000, generated by 198,769
non-users (95% of the population).
– The service cost £250,000.
7
• What have we seen?
– The size of population is the key to increase the value.
– Famous institutions are eligible to include a wider group of
population.
– If the funder considers this simple result, minor institutions
would be forgotten, for they cannot display such a high return.
8
• What have we seen? (Cont.)
– The economic valuations show that non-use value must be
included to achieve a high return.
– However, non-use value is not sustainable. (Why?)
– We would rather adhere to use value, which ensures the
worth of our existence.
9
• Additional Limitations of Contingent Valuation
–CV gives back only numbers. (unreal, can’t be used further to
improve the service): Like someone wears a chef uniform, but
cannot cook.
–Household income could limit WTP: Low income area tends to
yield a value smaller than high income area.
10
11
0
5,000
10,000
15,000
20,000
25,000
Regional Gross Disposable Household Income (ONS, 2010)
GDHI
0
2
4
6
8
10
12
14
Willingness to Pay for the British Library (2013)
WTP
12
• Other attempts to claim economic value.
– Economic impact: studying the user spending.
– The small number of users results in small value.
– Building metrics and qualitative research.
– Finally, the numeral result is required to correspond with the benefit cost model.
– Purchase acquisitions: historic collections
– The price appraised by experts will change the status of archives from public
goods to market goods.
– Some collections with an incredibly high price would be questioned by the public.
– Archival Economics: revisiting archives would accumulate the
return value perpetually
– A valuation is required now, so we cannot wait that long.13
• What I do
– Looking into others economic tools, as they have been
accepted by economists. Making our own metric may be
considered as a bias and cause difficulty in comparison.
– Investigating how the business sector deals with intangible
assets.
– Hopefully to find a method that satisfies economists and
favours our service.
14
• Sullivan (2000)
– Intellectual property/innovation affects the sales of products.
• Hubbard (2010)
– Anything can be measured, if the link to income is identified.
• Ataman (2009)
– Commercial equivalent concept.
15
16
17
UsersProduction Impact
The economic framework for archives
Archival Institution
Generate
Service
Offer WTP
Enable
Generate income
• Input-output analysis
– Provide a top-view of inter-industry demand
– The UK input-output measures the demand as a group of
“Libraries, archives, museums and other cultural activities”
– The table from ONS is an inclusive summary, so we need to
filter for archives value.
• Studies of regional i/o analysis
– Focusing on a particular area
– Shorten the length of study
18
• Conclusion
– Non-market valuation is not suitable for valuing archives,
because the user number is small, consequently yielding a
small value.
– Contingent valuation offers only notional numbers, with
palpable limitations.
– True economic value of archives comes from the usage.
– Input/output study can reveal the value chain to other
industries and market, where the economic impact of archives
occurs.
19
• Reference
– Ataman, B. K. (2009) ‘Archives Mean Money: How to Make
the Most of Archives for Public Relations Purposes—The Yapi
Kredi Bank Example’, American Archivist, 72(1), pp. 197–213.
– Hubbard, D. W. (2010) How to Measure Anything: Finding
the Value of Intangibles in Business, 2nd Edition edition.
Hoboken, N.J, John Wiley & Sons.
– Sullivan, P. H. (2000) Value-driven intellectual capital: how
to convert intangible corporate assets into market value,
Intellectual capital series (New York, N.Y.), New York ;
Chichester, Wiley.
20