Major Flaw in Economic Impact of "New" New Canaan Library

to Planning and Zoning:

Claims have been made that the proposed new library could bring in $6.6M to local businesses. I just discovered the economic impact study behind that number is posted on the Town’s web site. It makes for interesting reading. One issue is that $6.6M is the high estimate; the low estimate is only $346K. A bigger issue is that there is a major flaw in the logic, making the results meaningless.
The report summarizes how they arrived at the number. Here’s the gist of it: Basically, they did a survey of library patrons in June-July 2019. Survey questions asked if they patronized other local businesses or activities while in town for their current/last trip to the library (58% said ‘yes’) and, if so, which businesses (generically; the survey provided a long list of types of businesses) and approximately how much did they spend at each of those businesses.

The New Canaan Library automatically tallies the number of people entering the doors (800-1000 daily, no elimination of duplicates). From that information, they were able to calculate how much library patrons currently spend in town. They then studied other library construction projects in the State (1998-2017), including two subsets to try to narrow it down to communities like New Canaan, to see how much the renovation/construction projects increased the number of visits, using that to calculate the expected increase in local spending.

The flaw in the logic is that the survey did not ask library patrons whether they would have gone to those stores anyway and how much they would have spent if they hadn’t gone to the library. The top four businesses patronized were grocery stores, banks, the Post Office, and restaurants/cafés. Would people spend just as much at these businesses, with the possible exception of restaurants, whether or not they went to the library?

Without the answer to that question, there is no way of knowing how much business the library is or will draw to New Canaan.

The survey also did not ask which destination was the main purpose of the trip. Most people combine multiple errands/activities in one trip.

For people interviewed in-person while attending a library event, it’s a safe bet that the event was the main purpose. For others, who just dropped in during the day, was one of their kid’s activities elsewhere in town or running errands the primary purpose? Hypothetically (playing devil’s advocate), it makes just as much sense to say that one or more particular businesses (or all the stores collectively) are driving visits to the library as to say that the library is driving business to the stores. We just don’t have the information.

Of interest, out-of-towners made up 42% of library patrons surveyed in-person (25% of those surveyed by email). If the authors (CERC) could extract from their source data the amount spent by out-of-towners, that might be more relevant, but we still wouldn’t know what primarily drew them to New Canaan.

Another major issue is the guesstimate of how much the new building will increase library usage. CERC did their best to pick a reasonable number, but it’s an unknown. Of the 53 libraries they studied, the percent change in visits after construction ranged from a 38% decrease (New London) to a 500% increase (Scotland) and the peak number of visits varied from 0 to 17 years after construction.

Four libraries actually saw a decrease in visits and another three saw no change in visits after construction. Of nearby libraries, Darien had an 8% increase, Wilton 15%, Greenwich 17%, Westport 40%, and Norwalk 42%.

CERC settled on using a range of 3% – 40% increase (the range for towns of comparable affluence) and 2-6 years to reach the peak. They actually published three different estimates – low, middle, and high – for the increase in spending 6 years after construction, which worked out to $346K, $3.0M, and $6.6M, respectively.

Another fuzzy factor: CERC’s calculations assume that, despite an increased number of visits to the new library, people will continue to spend about the same amount per trip at local businesses.
The report was completed in January 2020, before the pandemic. The pandemic throws another whammy into any guesses about the future.

As the report points out, the library contributes to the local economy in many ways, of course. It employs almost 50 people, 40% of whom live in New Canaan, and employs youths in part-time jobs. It regularly does business with about 56 local vendors, and many of the presenters at library events are local. Overall, the New Canaan Library does business with over 200 local businesses and people. Over the prior five years (FY2015-FY2019), the New Canaan Library spent an average of $250,469 per year on local contractors and businesses. The report points out many other economic benefits of the library that aren’t so easily quantifiable.

CERC’s economic impact report for the library project is well written and informative, but the upshot is that there’s no way of knowing ahead of time how much library visits will increase (or decrease) after construction, we have no idea how much business the library draws to local businesses, and other underlying assumptions may or may not pan out.

We just don’t know what the economic impact of the new library building will be.

Sincerely,

Barbara B. Mason