Costs and Benefits of Data Provision report

Costs and benefits of Data Provision: Report to the Australian National Data Service (now ARDC) (2011) by Professor John Houghton examines the costs and benefits of public sector organisations making their Australian Public Sector Information (PSI) data freely available.

The study was undertaken by Professor 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:

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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