South Carolina Public Library Economic Impact Study - Illinois

Part II: Indirect Economic Impacts of all South Carolina Public LibrariesPurpose: The purpose of this section is to estimate the indirect economic impactsof expenditures made by all South Carolina public libraries through payment ofsalaries, building costs, equipment costs, etc.Method: There is some controversy about what kinds of multipliers to use whencalculating indirect economic impacts. A great variety of different approacheshave been used in studies of industries (such as individual companies), publicutilities (such as airports), universities and individual schools in them, arts andculture in an individual state, and for libraries. Recent studies in Florida(McClure, et. al., 2001) and (Griffiths, et.al. 2004) have also used differentapproaches and methods. Other studies are cited in the references section of thisreport (see University of South Carolina, Moore School of Business, as oneexample). From these various studies, particularly those concerned withestimating local/regional effects, we have taken what we consider a conservativeapproach. A estimate that is frequently cited by economists is that about $.36 isretained in the local/regional economy for every $1.00 spent (for wages, capitalexpenditures, etc.) as a secondary impact. When third, fourth, etc. level impactsare considered the figure goes to about $.637 for every $1.00 spent. For totalexpenditures of South Carolina’s public libraries we used the figures cited inMeasure 1 (above), which excludes 75% of the collection development costs ofmaterials, which are mostly expended out of state.Calculating formula: total expenditures in Measure 1 / .637• Total Indirect Economic Impact of all SC Public Libraries:$125,454,132• Library System Minimum: $172,362• Library System Maximum: $18,283,139• Library System Average: $192,003Thus, every $1 of SC state and local government expenditures returns $1.62 ofindirect economic impact.Total direct and indirect return on investment by SC local and stategovernments is: $2.86 + $1.62 = $4.48. Another way of saying this is that each $1 ofstate and local funds invested has about a 350% return on investment.South Carolina Public Library Economic Impact Study 61