The value of information in biosecurity risk-benefit assessment: an application to red imported fire ants

Policy makers are confronted daily with uncertainty, especially in complex areas like biosecurity. One way to improve decision-making and reduce uncertainties is to collect more information. Information is costly – whether the value of improved decision-making justifies the cost is a fundamental question facing policy makers. This paper addresses that question by making three practical contributions for binary choices (such as whether to implement or forego a particular policy). First, it analyses the determinants of the value of information, and how that value changes with features of the problem. Second, it uses this analysis to derive simple rules of thumb which provide upper bounds on the value of additional information. Third, it provides a practical application of the value of information in deciding whether to attempt eradication of the red imported fire ant.