The economics of the Internet public library

The economic model of the theory of the firm is a helpful framework to be applied to libraries. In particular, cost‐minimization measures can help determine how not‐for‐profit organizations should operate. Identification of cost types, as has been done in this article, is a first step towards a more in‐depth analysis of cost minimization and its applicability to not‐for‐profit organizations. Parts of the analysis conducted showed that the IPL, which started as an educational project, may not have been concerned initially with economic reality. The investigation of the IPL cost structure demonstrates that information about cost components of the IPL has not been considered from the beginning. As the organization grew, so did the costs, which finally became a major consideration. The IPL has to realize that without proper and sufficient knowledge of its economic basis, its economic viability is in jeopardy. Future research could use some of the basic data collected and analyzed in this project, to test the hypotheses of cost minimization.