This economic analysis of Indiana public libraries is an experimental and exploratory attempt at benefit-cost analysis of library service. The economic issues that arise in decisions concerning the provision and financing of libraries are highlighted. The questions that economists raise in analyzing the provision of public goods or services are given. The issues and questions that should receive attention if public agencies or other organizations are to make efficient use of resources in supplying library services are indicated. The evaluation in this part of the Indiana Library Studies Series applies to all libraries although most of the examples and data pertain to public libraries. (Author/NH)