Allocating the Book Budget: Equity and Economic Efficiency

Gold's cost-benefit 1nodel for allocating the book budget is critiqued from the point of view of practicability, economic theory, and equi-ty. It is concluded that allocative formulas are preferred alternatives for distributing the book budget among departmental funds. Eco-nomic efficiency via cost-effectiveness analysis is suggested as potential-ly useful for within fund acquisition of library-resource units. THIS PAPER WAS ORIGINALLY CONCEIVED as a brief discussion of Gold's marginal cost- benefit model for allocating the book budget among academic depart-ments.1 However, it soon became ap-parent that a more lengthy paper was necessary. Several features of cost-bene-fit analysis must be explored in order to put the marginal cost-benefit model in perspective. Furthermore, Gold advo-cates economic efficiency versus equity, an issue that challenges a fundamental premise by which librarians have tradi-tionally allocated the book budget. This problem brings up the role of allocative formulas and their validity. Finally, there was the need to comment on cost-effectiveness analysis and its potential impact on economically efficient acquisi-tion of library-resource units. DIFFICULTIES OF CosT-BENEFIT ANALYSIS In their oft-cited review article, Prest and Turvey list several limitations in principle to cost-benefit analysis. 2 Among these is the problem of intangible bene-fits; that is, those benefits that do no