The Value of Information to the Acidic Deposition Debates

This article is addressed to those interested in how Bayesian approaches can be brought to bear on research and development planning and management issues. It provides a conceptual framework for estimating the value of information to environmental policy decisions. The methodology is applied to assess the expected value of research concerning the effects of acidic deposition on forests. To calculate the expected value of research requires modeling the possible actions of policymakers under conditions of uncertainty. Information is potentially valuable only if it leads to actions that differ from the actions that would be taken without the information. The relevant issue is how research on forest effects would change choices of emissions controls from those that would be made in the absence of such research. The approach taken is to model information with a likelihood function embedded in a decision tree describing possible policy options. The value of information is then calculated as a function of information accuracy. The results illustrate how accurate the information must be to have an impact on the choice of policy options. The results also illustrate situations in which additional research can have a negative value.