Placing Value on Information

Introduction Society regards information as a commodity and the possession of it as an asset. Economists would like to account for information in the same way as physical assets, but no discipline has given us an accepted model for such treatment. Disciplines regard information differently, and it is more difficult to develop systems to measure information than physical commodities. The price system has been used to assign value to information, but does it provide the best means? Can librarians plan for the future, justifying increasing expenditures to their funding agencies, in the absence of a meaningful information measurement scheme? What is Information Worth? Information has become an element of commerce. In earlier times, success was based on such criteria as control of finance, physical resources, writing, food, fire or shelter. Today, successful people and businesses are those who control information: its development, access, analysis and presentation. We refer to our era as the "Information Age." We buy and sell information, sometimes with money and sometimes by trading it for other information. Information, as an element of commerce, is a commodity, yet there are no cogent, universally accepted accounting or economic theories of information. There are various frameworks in which we try to view and define information, various attempts to measure it, decide what kind of value it has, and determine how much it is worth. For example, disciplines such as economics, accounting, sociology and behavioral science regard information in very different ways. Economists define information as phenomena that reduce uncertainty, and measure it in terms of exchange rates based on supply and demand. Accountants think of costs and benefits (debits and credits), while sociologists concern themselves with the net public good of information. Behaviorists study cognitive and behavioral change brought about by information. Clearly, placing value on information is not a straightforward, single-step process. Information passes through many stages before it has value to anyone. It exists first in a latent state, waiting for the right paradigm or perspective, long before anyone recognizes it to be information. Then we realize that raw, unorganized data may be of some use. We collect it, organize it, analyze it and draw conclusions from it. Both the information and our conclusions can be communicated. Only when information has been comprehended, can we value it and respond to it. A determination of the actual value of information can be made only at this final stage. Information has no value in itself; its value is derived from its understanding and subsequent application. Before this last stage we can do no more than estimate the value we expect it to have. Society values only the product, or result, of information. Information as Commodity Business regards information as a commodity and the possession of it as an asset. Economists would like to treat and account for information in the same way as physical assets. However, no discipline has given us an accepted model for such treatment although analogies abound. Information can, to some extent, be valued and costed in the same way as the other assets of organizations, and included in their financial reports. As inventory, information goes through the value-added stages of raw material (events or processes to be measured), work-in-progress (information in development), and finished goods (marketable information). Information gathering and presentation require capital investment and human labor. Besides being costly to acquire, information incurs management costs. Like physical assets, information faces quality control inspection before it can be distributed. Information is subject to just-in-time requirements, just like physical inventory. Left on its own, its value may depreciate over time. At each stage or level of information, there are specialized vendors and customers. …