| Theoretical foundation | Price theories in microeconomics | Theories of public goods in microeconomics | Combination price theories, public goods theories, and public management theories |
| Application to the valuation of library services | - Using market prices of equivalent services to estimate the economic value of materials and services.- For old materials, some form of discounting for depreciation and previous usage is used. | - Using surveys of patrons (and residents) to estimate their willingness to pay for services. | - Using both market-equivalent price analysis and surveys of patrons (and residents) to estimate the full benefits of library services.- Value analysis based on public values and personal experiences. |
| Relative strengths | - Theoretically sound.- Seemingly more objective to the public and key stakeholders. | - Ability to capture consumer surplus and non-market value.- Ability to control and adjust for preference differences caused by individual characteristics. | - Ability to combine the relative strengths of both the market value and contingent valuation approach.- Ability to cross-check the sensitivity of different methods and approaches. |
| Challenges and weaknesses | - Tedious, costly, and time-consuming process to track the market prices of equivalent services.- Discounting can be arbitrary.- Failure to capture the full value of services, such as consumer surplus and non-market value. | - Cost of conducting large scale surveys.- Sensitive to survey design.- Sampling biases.- Seemingly less subjective.- Questionable representativeness if the sample size is small and sampling methodology is biased. | - More costly and time-consuming than either the market value and contingent valuation approach individually.- Survey design sensitivity and sampling biases in the survey component of the approach. |