IDEAS home Printed from
   My bibliography  Save this paper

Return-on-investment of public investments to systems which provide public services ? a case study


  • Simona Pichova
  • Jan Stejskal


In recent years there have been frequent efforts to analyse the systems for providing public production and propose to increase the productivity and find alternative service-delivery mechanisms based on public-choice assumptions and perspectives. It is used an approach New public services, which is oriented and accountable to the citizens, aimed at ensuring maximum well-being of a new approach to public production. It highlights the changing role of the public sector - from service delivery role into the policy development. It is necessary to solve a major problem. Public administrators have long struggled with how to measure outcomes of public programs because the performance measurement tools have traditionally neglected. The article presents the information about return-on-investment analysis and it build on the results of the project focused on the ROI analysis in municipal libraries in the Czech Republic. The data was obtained from the biggest public library of Czech Republic ? from Municipal Library of Prague (MLP). The survey was conducted in year 2012 as a qualitative and representative through an online questionnaire where was addressed 11,397 randomly selected readers of MLP. The return on the survey was 20 %, after the data file cleaning the basic set consists a 2227 of respondents. The calculation of the ROI value is performed by using the calculation of cost/benefit analysis. Input data - costs for providing of evaluated portfolio of the public services - into the cost/benefit analysis were obtained from MLP. These financial resources in the form of cost of the MLP are public investments because they come from the public budgets of the regional level. The result of the study presented in this paper is a calculating ROI for public investment. The methodology for ROI calculating of the public services systems is a very valuable tool for regional providers of public services and their investments. Through their assistance, regional providers can better orientate themselves when spending money and can make better decisions as to which services they will provide and to what extent. For the analysed library, it was found that its operation and provision of a selected range of library services is generally effective, but the rate of effectiveness is relatively low, approaching a value of one. Analysed library has a range of services what was defined which in turn are not effective. The methodology also monitors the extent to which individual services are used and economically evaluated by the consumers themselves. This data can be used both for the management of each library and their owners and regional donors. This was the first research of this type in this branch of the public sector with a high degree of representativeness, which has been implemented in Central and Eastern Europe.

Suggested Citation

  • Simona Pichova & Jan Stejskal, 2015. "Return-on-investment of public investments to systems which provide public services ? a case study," ERSA conference papers ersa15p1399, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa15p1399

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Bloch, Carter & Bugge, Markus M., 2013. "Public sector innovation—From theory to measurement," Structural Change and Economic Dynamics, Elsevier, vol. 27(C), pages 133-145.
    2. Jan Stejskal & Petr H�jek, 2015. "Evaluating the economic value of a public service-the case of the Municipal Library of Prague," Public Money & Management, Taylor & Francis Journals, vol. 35(2), pages 145-152, March.
    3. Sven Modell & Fredrika Wiesel, 2008. "Marketization and Performance Measurement in Swedish Central Government: A Comparative Institutionalist Study," Abacus, Accounting Foundation, University of Sydney, vol. 44(3), pages 251-283, September.
    4. José M. Alonso & Judith Clifton & Daniel Díaz-Fuentes, 2015. "Did New Public Management Matter? An empirical analysis of the outsourcing and decentralization effects on public sector size," Public Management Review, Taylor & Francis Journals, vol. 17(5), pages 643-660, May.
    5. Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
    6. Richard T. Carson, 2012. "Contingent Valuation: A Practical Alternative When Prices Aren't Available," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 27-42, Fall.
    7. Klose, Thomas, 1999. "The contingent valuation method in health care," Health Policy, Elsevier, vol. 47(2), pages 97-123, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blomquist, Glenn C. & Coomes, Paul A. & Jepsen, Christopher & Koford, Brandon C. & Troske, Kenneth R., 2014. "Estimating the social value of higher education: willingness to pay for community and technical colleges," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 5(1), pages 3-41, January.
    2. Laia Soler & Nicolas Borzykowski, 2021. "The costs of celiac disease: a contingent valuation in Switzerland," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1487-1505, December.
    3. Timothy C. Haab & Matthew G. Interis & Daniel R. Petrolia & John C. Whitehead, 2013. "From Hopeless to Curious? Thoughts on Hausman's 'Dubious to Hopeless' Critique of Contingent Valuation," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 35(4), pages 593-612.
    4. Haile, Kaleab K. & Tirivayi, Nyasha & Tesfaye, Wondimagegn, 2019. "Farmers’ willingness to accept payments for ecosystem services on agricultural land: The case of climate-smart agroforestry in Ethiopia," Ecosystem Services, Elsevier, vol. 39(C).
    5. Clive L Spash, 2008. "The Contingent Valuation Method: Retrospect and Prospect," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2008-04, CSIRO Sustainable Ecosystems.
    6. Carlsson, Fredrik & Kataria, Mitesh & Krupnick, Alan & Lampi, Elina & Löfgren, Åsa & Qin, Ping & Sterner, Thomas, 2013. "The truth, the whole truth, and nothing but the truth—A multiple country test of an oath script," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 105-121.
    7. Perez-Verdin, Gustavo & Sanjurjo-Rivera, Enrique & Galicia, Leopoldo & Hernandez-Diaz, Jose Ciro & Hernandez-Trejo, Victor & Marquez-Linares, Marco Antonio, 2016. "Economic valuation of ecosystem services in Mexico: Current status and trends," Ecosystem Services, Elsevier, vol. 21(PA), pages 6-19.
    8. Lopez-Becerra, E.I. & Alcon, F., 2021. "Social desirability bias in the environmental economic valuation: An inferred valuation approach," Ecological Economics, Elsevier, vol. 184(C).
    9. Dardanoni, Valentino & Guerriero, Carla, 2021. "Young people' s willingness to pay for environmental protection," Ecological Economics, Elsevier, vol. 179(C).
    10. Laura Ternent & Aki Tsuchiya, 2013. "A Note on the Expected Biases in Conventional Iterative Health State Valuation Protocols," Medical Decision Making, , vol. 33(4), pages 544-546, May.
    11. Krauth, Christian & Liersch, Sebastian & Jensen, Sören & Amelung, Volker Eric, 2016. "Would German physicians opt for pay-for-performance programs? A willingness-to-accept experiment in a large general practitioners’ sample," Health Policy, Elsevier, vol. 120(2), pages 148-158.
    12. Gómez-Valenzuela, Víctor & Alpízar, Francisco & Bonilla, Solhanlle & Franco-Billini, Carol, 2020. "Mining conflict in the Dominican Republic: The case of Loma Miranda," Resources Policy, Elsevier, vol. 66(C).
    13. Caroline Steigenberger & Magdalena Flatscher-Thoeni & Uwe Siebert & Andrea M. Leiter, 2022. "Determinants of willingness to pay for health services: a systematic review of contingent valuation studies," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(9), pages 1455-1482, December.
    14. Kangethe, Anne & Franic, Duska M. & Corso, Phaedra S., 2016. "Comparing the validity of the payment card and structured haggling willingness to pay methods: The case of a diabetes prevention program in rural Kenya," Social Science & Medicine, Elsevier, vol. 169(C), pages 86-96.
    15. Mark A. Andor & Manuel Frondel & Stephan Sommer, 2018. "Equity and the willingness to pay for green electricity in Germany," Nature Energy, Nature, vol. 3(10), pages 876-881, October.
    16. Félix Muñoz-García & Tongzhe Li, 2018. "Explaining Hypothetical Bias Variations Using Income Elasticity of Demand," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 35(3), pages 207-224, September.
    17. Giotis, Thomas & Drichoutis, Andreas C., 2020. "Consumer acceptance and willingness-to-pay for insect-based foods: The role of proximity of insects in the food chain," MPRA Paper 104840, University Library of Munich, Germany.
    18. Jobstvogt, Niels & Watson, Verity & Kenter, Jasper O., 2014. "Looking below the surface: The cultural ecosystem service values of UK marine protected areas (MPAs)," Ecosystem Services, Elsevier, vol. 10(C), pages 97-110.
    19. Gáfaro, Margarita & Mantilla, Cesar, 2021. "Environmental valuation using bargaining games: an application to water," OSF Preprints tcfyb, Center for Open Science.
    20. Picardy, Jamie Ann & Cash, Sean B. & Peters, Christian, . "Uncommon Alternative: Consumers’ Willingness to Pay for Niche Pork Tenderloin in New England," Journal of Food Distribution Research, Food Distribution Research Society, vol. 51(2).

    More about this item


    public investments; public services; return-on-investment analysis; library;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa15p1399. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.