What is the Value of Information?

(Part 1): Assigning Value

With the dawn of the World Wide Web, and it’s subsequent information overload, came the misconception that all that information bombarding us was accurate, useful–and free. In this three part series, What is the Value of Information? Liz Bibby, Director of Business Information Services, examines this assumption. In part one of the series, Assigning Value, she considers issues related to cost and pricing of information.

Have you ever asked yourself, “What is the value of information?” If you have thought about the value of information, you will have realized that there can be many different answers, depending on how you approach the question. One EC student who recently inquired how to rapidly get up to speed on hedge funds (he’d landed an interview) might even have considered paying for the Baker Library Hedge Fund Guide! Fortunately, he didn’t need to, since Baker Library provides it free on its Web site.

Assuming that one agrees information does have some inherent value, how does one assign a value to a specific item? There are many ways of doing this. One obvious way is to determine what it costs to obtain the information. Included would be actual costs charged by a vendor who owns, collects, and/or publishes the information. Examples include the price paid for a book, or the subscription rate for a journal. As everyone knows, one can pay list price or get a discount.

The same is true for database licenses. The “list’ price for a database almost always varies between the corporate price and the academic price. Usually the academic price is much lower, but that might reflect the fact that some specific content, feature, or functionality available in the corporate version is excluded. For example, some customization options might not be included or some of the information might be under a date embargo.

Sometimes there is a choice between buying an “all you can eat” license and buying access to an index, then purchasing reports one-by-one, as you need them. Usually academic licenses follow the “all you can eat” model. But when you work in a corporate environment and need an Investext report, for example, you might need to decide whether to pay for just the executive summary, some other portion, or the complete report. Have you noticed how many of the databases on our pull-down menu have the words “Current HBS only” beside them? That’s because Baker Library licensed those databases for our own user population. If Harvard University licensed the same databases, they would probably pay a much higher fee, based on the larger population of the Harvard-wide community.

The price charged for most commercially produced information reflects the actual costs to acquire and publish the information. These could include author royalties, data entry costs, editing, fact verification, database design, organizing, indexing, classifying, printing, sales, and marketing and distribution costs, in addition to a markup to profit the producer.

Quality is a big factor in determining the value of information. Performing quality control on published information has a real cost that is either included in the sale price or absorbed by the producer. The latter is often the case for information that is published by a government or nonprofit agency. Even in commercial publications, quality still varies. Quality and accuracy varies in free information found on the Web–so, beware! At Baker, librarians evaluate potential content and attempt to purchase, or point to, only content that is of consistently good quality.