Birol, E., and P. Koundouri, Choice Experiments in Europe: Economic Theory and Applications. Edward-

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1 EXECUTIVE SUMMARY In August 2008 the European Commission (EC) launched the OpenAIRE (Open Access Infrastructure for Research in Europe) project, supporting Open Access (OA) to EC-funded scientific information and research output. OpenAIRE connects institutional and thematic repositories, Open Access journals and Current Research Information Systems (CRIS), developing and promoting interoperability mechanisms for the efficient dissemination of scientific content, and monitoring uptake of funders OA policies. The present study was commissioned in order to assess the economic sustainability of the OpenAIRE project. A project is sustainable if its total benefits exceed its total costs over a specified time period. Following the European Commission s guidelines 1, this study uses the framework of Cost-Benefit Analysis (CBA: a method that assesses the monetary social costs and benefits of an investment project over a time period in comparison to a well-defined baseline alternative) in order to evaluate and compare the costs and benefits of OpenAIRE services, and provide explicit recommendations on the project s economic efficiency and sustainable existence. OpenAIRE costs are explicitly documented in the market, while its benefits are hidden (shadow effects) as these are not traded in any explicit market. As such these benefits can only be retrieved via the use of non-market valuation econometric methods. In this study we adopt the Choice Experiment 2 non-market valuation method, which is based on elicitation of individual stakeholders stated preferences and their aggregation over their relevant populations, which gives the Total Economic Value (TEV) generated by OpenAIRE. The figure below outlines the adopted methodology: Koundouri, P., The Use of Economic Valuation in Environmental Policy: Providing Research Support for the Implementation of EU Water Policy under AquaStress. Routledge, Taylor and Francis Group. Series: Routledge Explorations in Environmental Economics. ISBN: (244 pages) Birol, E., and P. Koundouri, Choice Experiments in Europe: Economic Theory and Applications. Edward- Elgar Publishing, Wally Oates and Henk Folmer's 'New Horizons in Environmental Economics' Series. ISBN: (337pages) Koundouri, P., Econometrics Informing Natural Resources Management: Selected Case Studies Edward- Elgar Publishing, Wally Oates and Henk Folmer's 'New Horizons in Environmental Economics' Series. ISBN: (336 pages).

2 COSTS Accounting Costs Estimation: Measuring the Monetary Cost of OpenAIRE A cost analysis allowed detailed calculation of the cost of the OpenAIRE coordination platform. These costs include network and organizational costs (NOADs operations and their coordination, setup costs of the current technical platform, its operation, maintenance and enhancement with new services and the managerial and marketing related costs. The total annual OpenAIRE s operation cost with the new functionalities is 1,251, Euros (1,100, Euros without the new functionalities) 3. BENEFITS Stakeholders Analysis: Measuring the Willingness to Engage (WTE) with OpenAIRE Identification of priority stakeholder categories: Libraries/Archives, Repository Service Providers, Research Funders, Research Organizations/Laboratories, Researchers/Scientists, University Administration. University Administration has the highest WTE with OpenAIRE, as well as a high level of knowledge about its services. Researchers and Scientists have very low WTE, but expect OpenAIRE to benefit the research community. 3 CERN s Zenodo costs are separate and are mainly based on usage.

3 Research Funders and Research Organizations/Laboratories do not yet see direct benefits from OpenAIRE s operations, or the vision is not clear enough. Remaining categories are knowledgeable and interested in OpenAIRE but are not yet WTE. Choice Experiment: Measuring the Willingness to Pay (WTP) for OpenAIRE The design and implementation of a Choice Experiment allowed the monetary measurement of WTP for the following three categories of services: Access to Scientific Results and Compliance to OA Mandates; Interoperability 4 between research output and research platforms; Miscellaneous Services. Each category is offered at two levels. The first level corresponds to the basic services already provided by OpenAIRE and the second level corresponds to additional services that OpenAIRE can potentially provide in the future. The estimated WTP (per service/per institutional stakeholder/per year) corresponds to the monetary value of the benefits that stakeholders derive from the existence and use of OpenAIRE services. In summary, the results suggested that: The average OpenAIRE stakeholder is WTP /institution/year for the basic services provided by OpenAIRE. The average OpenAIRE stakeholder is WTP additional amounts for additional services. Specifically: An additional /institution/year for higher interoperability (publication-dataset resolver) An additional /institution/year for better access to scientific results (supplemental material) and compliance to OA mandates. Not WTP for additional miscellaneous services. This study details stakeholders WTP for different combinations (scenarios) of OpenAIRE services provision. Below we present the upper and lower bound 5 of average WTP between considered scenarios: WTP for more interoperability, more access to scientific results and compliance to OA mandates and basic level of miscellaneous services is /institution/year. WTP for basic level of interoperability and access to scientific results, and higher level of miscellaneous services is /institution/year. In general, OpenAIRE stakeholders prefer to have services that support high interoperability, access to scientific results and compliance to OA mandates. 4 When we talk about interoperability we refer to interoperability between research output and research platforms because OpenAIRE connects research output by connecting research platforms. 5 Whenever you have an interval of values, this interval has a minimum and maximum value. Minimum value defines the lower bound of the interval and max value defines the upper bound of the interval.

4 COST-BENEFIT ANALYSIS, SUSTAINABILITY & FINANCIAL INSTRUMENTS CBA: Measuring the Net Social Benefits of OpenAIRE over time. A CBA analysis assessed the costs and benefits of OpenAIRE under a number of alternative scenarios for the dynamics of the estimated costs and benefits. General Result 6, which is robust for all dynamic scenarios of costs and benefits: The discounted cost of OpenAIRE s 15-year operation is smaller than the corresponding discounted benefits, for all different combinations of services provided The annual cost for OpenAIRE is estimated at 1,350,000 euros. This implies a per institution annual fee of 675 /institution/year (assuming suscription of 2000 institutions) in order to achieve financial sustainability of OpenAIRE. The average OpenAIRE stakeholder is WTP /institution/year for the basic services provided by OpenAIRE, while the lower bound stakeholders WTP is estimated at /institution/year. Hence, the annual fee per institution required for financial sustainability of OpenAIRE is lower than the lower bound of annual WTP per institutional stakeholder. This means that OpenAIRE is financially sustainable and social welfare increasing. Specifically, net social benefits are estimated at: 5,724,000 for the provision of OpenAIRE basic services, and range between 7,222,500-5,562,000 for different combinations of OpenAIRE services. The simulated potential R&D effect from the existence of OpenAIRE suggests even larger net social welfare benefits in the long run: with Benefit/Cost ratios of for 50 years, for 75 years and for 100 years. Risk analysis supports the robustness of the study s results under different assumptions on future costs and benefits. 6 This is valid under all scenarios of costs and benefits and robust in risk analysis.

5 SUMMARY OF RESULTS Question Instrument of Measurement Answer WHO has more to gain? WHICH services/characteristics are important for stakeholders? Stakeholders Analysis: Willingness to Engage Stakeholders Analysis: Willingness to Engage Choice Experiment: Willingness to Pay Important Stakeholders: - Researchers (High interest in OpenAIRE) - University Administration Invest in making OpenAIRE as user-friendly as possible: - Focus on supplemental material and publication-dataset resolver. - Minimize time needed to get familiar with OpenAIRE. HOW much does it cost? Cost Estimation Yearly Total Cost: 1,350,000 HOW much are stakeholders Willing to Pay? HOW much does Society Gain? Choice Experiment: Willingness to Pay for different combination of services Costs-Benefit Analysis under alternative scenarios Robustness Check: Risk Analysis under alternative scenarios RECOMMENDATIONS - Average OpenAIRE stakeholder is WTP /institution/year for the basic services provided by OpenAIRE. - WTP Lower Bound: /institution/year - WTP Upper Bound: /institution/year 15 year Time Horizon, Net Social Benefits - Basic Servicers: 5,724,000 - Upper Bound: 7,222,500 - Lower Bound: 5,562,000 Long-run Benefit/Cost Ratio: for 50 years for 75 years for 100 years Recommendation 1: Average Institutional Fee for Sustainable Operation: 675 /institution/year (assuming 2000 institutional subscribers) Implementation of Institutional Fee: via budget reallocation from institutional services that are substitutable from OpenAIRE services. Fee discrimination 7 between stakeholder groups: each stakeholder group should be charged a fee equal to its marginal WTP as estimated via the Choice Experiment. This will allow higher revenues for OpenAIRE. Recommendation 2: European or State Subsidies for OpenAIRE. Subscription for countries or institutions, respectively, which cannot afford the minimum fee, given estimated net social benefits in the short and medium run and huge long-term benefits for Research & Development. Recommendation 3: Increase Public Engagement via Awareness Campaigns in order to attract more users (and capitalize on spillover effects) and protect OA nature of OpenAIRE. 7 This refers to fee discrimination between users: each users is charged with a fee which corresponds to her estimated willingness to pay. Given that: we have estimated WTP for different stakeholder groups economic theory dictates that in order to achieve efficient and sustainable allocation of resources the fee (price) of any good or service should be equal to the marginal WTP We should charge each stakeholder group with a fee which is equal to her WTP as estimated via the Choice Experiment