Value of information

Value of information analysis is a quantitative method to estimate the return on investment in proposed research projects. It can be used in a number of ways. Funders of research may find it useful to rank projects in terms of the expected return on investment from a variety of competing projects. Alternatively, trialists can use the principles to identify the efficient sample size of a proposed study as an alternative to traditional power calculations, and finally, a value of information analysis can be conducted alongside an economic evaluation as a quantitative adjunct to the ‘future research’ or ‘next steps’ section of a study write up. The purpose of this paper is to present a brief introduction to the methods, a step-by-step guide to calculation and a discussion of issues that arise in their application to healthcare decision making. Worked examples are provided in the accompanying online appendices as Microsoft Excel spreadsheets

The origins of VoI lie in the work of Raiffa and Schlaifer on statistical decision theory at Harvard [2, 13, 14]. The starting point is that there is some objective function to be maximised, and a choice between courses of action leading to uncertain payoffs with respect to the objective function.

A Practical Guide to Value of Information Analysis Edward C. F. Wilson, PharmacoEconomics (2015) 33:105–121 DOI 10.1007/s40273-014-0219-x

Pratt J, Raiffa H, Schlaifer R. Introduction to statistical decision theory. Cambridge: Massachusetts Institute of Technology; 1995

Raiffa H, Schlaifer R. Probability and statistics for business decisions. New York: McGraw Hill; 1959.

Raiffa H, Schlaifer R. Applied statistical decision theory. Boston: Harvard Business School; 1961.

The value of information is a central concept in decision analysis, used to quantify how much the expected outcome of a decision would be improved if epistemic uncertainty could be resolved prior to committing to a course of action. One of the challenges, however, in quantitative analysis of the value of information is that the calculations are demanding, especially in requiring predictions of outcomes as a function of alternative actions and sources of uncertainty. However, the concept of value of information is important in early framing of some decisions, before such predictions are available. We propose a novel measure of the value of information based on constructed scales (CVOI), grounded in the algebra of the expected value of perfect information (EVPI), but requiring less of experts and analysts. The CVOI calculation decomposes EVPI into a contribution representing the relevance of the uncertainty to the decision and a contribution representing the magnitude of uncertainty; constructed ratio scales are then proposed for each contribution. We demonstrate the use of CVOI to identify research priorities related to migratory bird management in the face of climate change.