How much is data worth?
To answer that, I share this quote from Daniel Lapin’s book, Thou Shall Prosper. He intends to communicate an important business principle, but in doing so, he reminds of an important lesson about data and information.
Value is not like any other measurement. I could look at an old glass jar and easily determine its weight. To do so, all I would need is an accurate scale. With a ruler, I could tell you its height, and it wouldn’t take very advanced mathematics for me to calculate its volume. The figures that I would arrive at are true regardless of where I would move that jar, and they remain true regardless of where on earth (or even in space, as long as I speak of mass rather than its weight) I place it. The value of the glass jar, however, is quite different.
What is often mystifying is how an object’s value can increase without any corresponding increase in its physically observable measurements. If a barge of grain increased in value because another 50 tons of wheat was loaded onto the now topped-up barge, you would understand that it now is worth more. No mystery there. However, when the barge of wheat seems to increase in value simply because the trader who purchased it happens to have the knowledge about a certain place where grain is badly needed, the transaction reeks of sorcery or cheating.
Information transformed into insight adds value.
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ATOMs is a monthly column that introduces analytical tools of mathematics and statistics and illustrates their application. To read more about ATOMs, go to the incomplete index, read Where Do We Go From Here, or view the online workbook here.