CAN THE ECONOMIC VALUE OF INFORMATION BE CALCULATED?

Contrary to popular belief, the value of information can be calculated and expressed as a dollar value! Or so says Mr. Doug Hubbard.

Credit goes to Hubbard Decision Research that wrote a white paper entitled “Applied Information Economics: A New Method for Quantifying IT Value.”

I’ve been reading more of this author’s works. I think they’re impressive. So does Lucent, the Department of Defense, and his other clients.

This is how Mr. Doug Hubbard explains the calculation process:

1. Information reduces uncertainty.
2. Less uncertainty improves decisions.
3. Better decisions result in more effective actions.
4. Effective actions improve profit.

He concludes by stating that:

These four steps can be stated in unambiguous mathematical terms. The mathematical model for this has been around since the late 1940s.

Do you agree with the process as he explained it?