1.3 The Value of Information

1.3.1 Value of information

The value of information is calculated with respect to its usage in decision making and return
on benefits due to the decision taken. Therefore, the cost of information has to be deducted
from the benefits in order to calculate the value of information.

For example, someone wants to invest in stock market but he/she is not familiar with the
business procedure, he can then recruit an assistant to evaluate stock market conditions to
determine an investment plan. This assistant will have to gather stock market information and
generate reports to according his clients requirements. However, if the return of investment is
not significant with respect to cost incurred to produce the investment plan, it is worthless to
recruit an assistant for this activity. In other words, the value of investment plan is very low.