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Costs and Benefits of Data Provision

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Cost Benefit In 2011 ANDS commissioned the Centre for Strategic Economic Studies at Victoria University to examine the costs and benefits of public sector organisations making their Public Sector Information (PSI) data freely available.

The study involved a number of public sector agencies, each suggesting different benefit:cost ratios (all were positive, with the factor ranging from approximately five to 20).

Overall, the study did demonstrate that the benefits outweigh the costs by some considerable margins, meaning the case for making PSI freely available is strong. Importantly, these are not one-off figures, they are annual and ongoing, and so the benefits accrue.

Summary

The study was undertaken by Professor John Houghton, a prominent economist and researcher in the 'open access' field. What characterises this report as being different from some previous efforts is that it is focused on the costs and benefits to the organisation, users and the wider economy (separately and collectively).

The key equation in the study can be represented as:

cost-benefit

By using time series of real agency data, Professor Houghton was able to model the costs and benefits before and after the decision to freely publish was made. Having such data either side of the decision makes it possible to estimate the value of free data decision, rather than other factors such as growth or decline in demand. He was also able to model the savings to users and estimate the wider benefits to the economy, which include factors like multiple and sequential use (and reuse) of data.

The study involves a number of agencies, each suggesting different benefit:cost ratios (but all positive). Professor Houghton stresses that the ratios themselves should not be compared because they reflect more the nature of the underlying data rather than the agencies involved. The study demonstrates that the benefits outweigh the costs by some considerable margins, meaning that the case for making PSI freely available is strong. Importantly, these are not one-off figures, they are annual and ongoing, and so the benefits accrue over time.

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