College and Research Libraries


GARY S. SAMPSON 

Allocating the Book Budget: 

Measuring for Inflation 

A simple algebraic method of compensating for inflation while allocating the 
book budget by funds is presented. Also described are the results of at-
tempts to generate library-resource unit cost figures based on internal 
measurement of buying patterns . As the necessary management information 
becomes more available through the spread of automated acquisitions sys-
tems, the method. should prove useful in changing professional and faculty 
budgetary thinking from dollar amounts to library-resource units. 

ONE OF THE MOST enduring sports in the 
field of academic librarianship is the ongo-
ing attempt to create a rational, scientific 
model for allocating the book budget. One 
such model, which was described in these 
pages in 1974, proposed that the book 
budget be allocated by assigning funding 
units (e.g., art, psychology) a proportion of 
library-resource units instead of line-item 
amounts of money. 1 A library-resource unit 
was defined as being one monograph, one 
serial subscription, or a comparable mi-
croform unit. The model further proposed 
that the internal monograph-serial balance 
within each funding unit be set according to 
an agreed upon optimum for the discipline. 

The theoretical merits of this model were 
sharply debated in subsequent articles, and 
it is not the author's purpose to join in this 
debate. 2 It can, however, be reported that 
this model has been in use at the Portland 
State University library for the past two and 
one-half years on the mo~ographic side of 
the book budget. Combined with internal 
measurement of monographic inflation 
rates, it has proved to be an effective tool 
for compensating for differing inflation rates 
among the various discipline funding units. 
And, when the original matrix form of the 
model is transposed into simple algebraic 
form, it is extremely easy to apply. 

This article describes the algebraic form 
of the proportional budgeting model and 
briefly outlines PSU's experience with de-
termining inflation rates based on its own 
purchases. 

ALGEBRAIC PROPORTIONAL 
BUDGETING MODEL 

The use of this model assumes that each 
funding unit within a book budget has been 
assigned a proportion of the total number of 
monographic library-resource units the 
budget will buy (e.g., English, 0.5; physics , 
0 .3; art, 0.2) . It further assumes that a re-
cord of purchases by funding unit has been 
kept so that funding unit costs can be pro-
jected. The accuracy of the model depends 
on the accuracy of the inflation projections. 
The worth of the model depends on the ap-
propriateness of the funding unit allocation 
proportions. Its purpose is to maintain the 
allocated proportions according to a set 
standard, hopefully optimal. 

The algebraic proportional budgeting 
model as applied to monographs is quite 
uncomplicated. It is a simple algebraic 
equation solving for one unknown , X, the 
total num her of monographic library-
resource units the budget will buy. The 
equation is as follows: 

Gary S. Sampson is assistant acquisitions where: T 
librarian, Portland State University, Portland, 

the amount of money available 
for monographs. 

Oregon . X the number of monographs the 

I 381 



382 I College b Research Libraries • September 1978 

budget (T) will buy. 
M = the proportion of monographs 

allocated to a given funding 
unit. 

U the unit cost of a monograph 
within a given fund as deter-
mined by inflation in that dis-
cipline. 

As an example, let us look at a sample li-
brary book budget over a two-year period. 
In "year one" our sample library has a 
monographic book budget of $10,000 and 
three individual funding units. The funding 
units have the following characteristics: 

Fund #1: Proportion, 0.5 of monographs. 
Unit cost for "year one," $10. 

Fund #2: Proportion, 0.3 of monographs. 
Unit cost for "year one," $15. 

Fund #3 : Proportion, 0.2 of monographs. 
Unit cost for " year one," $30. 

X, the number of monographs the budget 
will buy, becomes the following in "year 
one": 

$10,000 =X (0.5($10) + 0.3($15) + 0.2($30)) 
X= 645 

The book budget by funding unit would 
be: 

Monographs 
Fund #1 : 0.5 times 
645 times $10: 323 

Fund #2: 0.3 times 
645 times $15: 194 

Fund #3 : 0 .2 times 
645 times $30: 129 

totals 646 
(inaccuracies are due to rounding) 

Dollars 

$ 3,230 

2,910 

3,870 
$10,010 

Let us say that in "year two" no program 
changes have taken place, and we want to 
maintain the proportions we had in "year 
one." The book budget, however, has in-
creased to $15,000, and the new cost of 
monographs is predicted to be the following 
by fund: 

Fund #1: $12 each. 
Fund #2: $16 each. 
Fund #3: $40 each. 

The new budge't then becomes: 

$15,000 =X (0.5($12) + 0.3($16) + 0.2($40)) 
X= 798 

Monographs Dollars 
Fund #1: 0.5 times 
798 times $12: 

Fund #2: 0.3 times 
798 times $16: 

Fund #3: 0.2 times 
798 times $40: 

399 

239 

157 
totals 795 

(inaccuracies are due to rounding) 

$ 4,788 

3,824 

6,280 
$14,892 

If unit cost estimates are at all accurate, 
keeping the proportions constant clearly is a 
simple matter: 

INTERNAL MEASUREMENT 
OF MONOGRAPHIC INFLATION RATES 

The above method of allocating mono-
graphic library-resource units is only useful 
if the unit costs can be accurately predicted. 
Internal measurement of monographic infla-
tion has in fact proven to be surprisingly 
close. Using internal cost records broken 
down by funding unit from fiscal year 
1972-73 on, the cost of a monographic 
library-resource unit in 1975-76 was pre-
dicted to be $12.23. In fact it turned out to 
be $12.14, a difference of nine cents. Costs 
of $12.69 were predicted for 1976--77. The 
true cost was $12 .77, a difference of only 
eight cents. In 1977-78 the projected cost 
fell short of actual cost by $1.13, $13.37 as 
opposed to $14.50, but this was well within 
an accuracy range· of 10 percent. 

When the unit cost projections are exam-
ined on a fund-by-fund basis, there is some 
scatter from the predicted amounts, but the 
results are still accurate enough to give a 
reasonable idea of how many library-
resource units a given funding unit budget 
will buy. The 1976--77 and 1977-78 results 
for PSU 's thirty-six disciplinary funding . 
units are shown in tables 1 and 2. 

The funds, of course, vary greatly in size. 
When table 1 is adjusted for the number of 
monographs purchased in each fund, the 
accuracy of the projections is seen to be 
even greater than suggested by th~ table. 

The tables suggest that accuracy is im-
proving with experience. In general, the 
larger the fund and the more clearly de-
fined the discipline, the easier it is to pro-
ject future unit costs. History and biology, 
for example, were projected to $13.14 and 
$26.35 in 1977-78. Actual unit costs for 
these funding units were $12.87 and $26.49, 



Allocating the Book Budget I 383 

TABLE 1 

PROJECfiON ACCU RACY BY F UN D 

Unit Cost Ran~~:e 

Within 10% of estimates : 
Between 10% and 20% : 
Between 20% and 30% : 
More than 30%: 
Totals: 

Number 
of funds 

16 
11 
5 
4 

36 

1976--77 
Percent 
of fund s 

44.4% 
30.6 
13 .9 
11.1 

100.0% 

Number 
of funds 

20 
12 
1 
4 

37 

1977- 78 
Percent 
of fund s 

54.1% 
32.4 

2.7 
10.8 

100.0% 

TABLE 2 

PROJ ECTION ACCU RACY BY NUMBER OF MONOGRAPHS 

1976--77 
Number 

Unit Cost Ra n~~:e of vols. 

Within 10% of estimates : 6,156 
Between 10% and 20% : 2,897 
Between 20% and 30%: 584 
More than 30% : 741 
Totals : 10,378 

respectively . Smaller or less well defined 
disciplines prove to be more difficult to 
predict . Costs for theater arts and systems 
science were projecte d at $12 . 52 and 
$16.44. Actual costs in 1977-78 we re $10.94 
and $19 .29. 

CONCLUSION 

In the absence of a generally accepted 
budget allocation formula, the actual alloca-
tion of book budget funds is often based on 
arbitrary power relationships within the col-
lege or university. Even if the allocation 
process is carried through with total good-
will and general agreement on all sides, dif-
fering rates of inflation can undo an agree-
ment in two or three years if it is made in 

Percent 
of vols. 

59.3% 
27.9 
5.7 
7. 1 

100.0% 

Number 
of vols. 

5 ,035 
2,103 

130 
275 

7,543 

1977- 78 
Perce nt 
ofvols. 

66.8% 
27.9 

1.7 
3.6 

100.0% 

terms of dollars instead of proportions . 
The method of allocation outlined above 

has two distinct advantages over methods 
that simply reflect academic power relation-
ships. The first is that it neutralizes inflation 
with surprising effectiven'e'ss. The second, 
and perhaps more important, advantage is 
that it can be a step toward making faculty 
accustomed to thinking about book budgets 
in terms of units of what is being purchased 
instead of in terms of money. We do, after 
all , note "a dozen eggs and a quart of milk" 
on our grocery lists, not "eggs , 73'¢ ; milk , 
46¢. " Substituting the "library-resource 
unit" concept and propor'tional allocations 
for simple dollar distribution could be a 
step toward rationalizing how resources will 
be distributed in the future. 

REFERENC ES 

1. Joseph J. Kohut , " Allocating the Book Budget: 
A Model , " College & Research Libraries 
35:192-99 (May 1974). 

2. See the le tter by William E. McGrath and the 
response by Joseph J . Kohut , College & Re-
search Libraries 35:37{}-71 (Sept. 1974); Ste-
ven D . Gold, "Allocating the Book Budget: An 

Economic Model ," College & Research Librar-
ies 36:397-402 (Sept. 1975); Joseph J. Kohut 
and John F . Walk e r, " Allocating the Book 
Budget: Equity and Economic Efficiency ," 
College & Research Libraries 36:403-10 (Sept. 
1975); and letter by Steven D . Gold , College 
& Research Libraries 37:369 (July 1976) .