[Discuss] Economic value of OSH work

[Matt Maier]

That's an interesting question. Assuming this is the sort of thing you
meant http://www.investopedia.com/terms/a/absolute-value.asp it seems like
it's not an appropriate framework. The value of something in economic terms
is calculated based on how much money other actors would exchange for it if
they were looking to maximize their return based on their risk profile. But
open source development doesn't involve money. At least, money isn't the
thing that actors exchange.

In a philosophical sense this framework seems backwards. Open source
development doesn't create something of value, it removes the need for
something of value. The "gift" that is given is freedom from the
requirement of exchanging anything. It adds to the common pool of
knowledge, like pouring water into a river or planting a tree. Wealth
without money. It's like calculating the absolute economic value of a
street sign. Yeah, it cost something to manufacture and deliver, but nobody
exchanges anything for the use of it. They don't even rent it, they just
benefit from it without ever needing anything. Neither a homeless
vagrant nor a limo driver needs to have any money in their pocket to use
the street sign. I supposed you could try to figure out an economic value
by asking people how much they would pay if they had to, but there's going
to be a huge variance. The person out for a stroll won't pay anything and
the person in the ambulance will pay a small fortune for the information.

Producing open source isn't like making a brick, it's more like patching a
sidewalk. Nobody has to come to you and ask for your brick, they just use
the sidewalk whenever they feel like it, in whatever way they feel like it,
and it is one less problem they have to worry about dealing with. It's the
commons, and like all externalities it's difficult to assign an economic
value to it http://onthecommons.org/economic-theory-commons

A big part of the point is that you don't know anything about the people
using your contribution. You just put it out there, and people can use it.
You might be able to track the number of people who drive past a street
sign (download a file) but there's no telling how important it was to them
nor how many of them passed the information along on a map or
something (copied the file to a new hosting location).

Perhaps we could look to things like this, where they tried to figure out
the value of:
digital maps
http://googleblog.blogspot.com/2013/01/mapping-creates-jobs-and-drives-global.html
or GPS
http://www.insidegnss.com/node/3833
or the internet
http://www.valueoftheweb.com/

It's like assigning a dollar value to good health or emotional stability.
Sure, we can probably do that, but we're just looking for our keys under a
street lamp because the light is good, not because we lost our keys
anywhere near the street lamp.

On Tue, Sep 2, 2014 at 6:13 AM, Joshua Pearce <professor.pearce at gmail.com>
wrote:

>  Hi All,
>
> I know that many of you has been thinking about how to determine the value
> of OSH work. Are you aware of any methods to calculate absolute value in
> real economic terms?
>
> For example if you spend an hour of your time making an OpenSCAD file for
> a parametric test tube rack and put it in the public domain - and then for
> the rest of time anyone can download the file, customize the rack for their
> needs and print it for the cost of materials and a tiny amount of
> electricity. How much is that gift worth?
>
> Clearly it is more than your opportunity cost or wage for one hour...but
> how much more is the value to humanity?
>
> Is it:
> (cost to purchase - cost to print) x (number of people downloading it)?
>
> or
>
> (hourly wage of person needing a test tube rack) x (number of people using
> it)?
>
> or
>
> total value of the test tube market - (cost to print)x (number of racks in
> the market) ....summed for N years?
>
> or
>
> As the cost of test tube racks has now decreased it is the total value of
> the current market + a bonus for expanding future use because of lower
> costs + some kind of educational bonus because more schools can afford them
> + some fraction of future discoveries made possible because now part of the
> expense of doing science was decreased.....
>
> or
>
> Is there a better way to do this - and get to quantification?
>
> Thanks!
>
> Joshua
>  Joshua M. Pearce, Ph.D.
> Associate Professor
> The Michigan Tech Open Sustainability Technology Lab
> <http://www.appropedia.org/Category:MOST>
> Department of Materials Science & Engineering
> Department of Electrical & Computer Engineering
> Michigan Technological University
> 601 M&M Building
> 1400 Townsend Drive
> Houghton, MI 49931-1295
> 906-487-1466
>
> Open Source Lab <http://store.elsevier.com/coArticle.jsp?pageid=18200010>
>
> _______________________________________________
> discuss mailing list
> discuss at lists.oshwa.org
> http://lists.oshwa.org/listinfo/discuss
>
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.oshwa.org/pipermail/discuss/attachments/20140902/e8b64c67/attachment-0001.html>