5.1 What is value?
The discipline of economics employs two related meanings for value. The first is the one we are most familiar with on a daily basis: the quantity of a commodity for which goods or services can be exchanged. This is ‘value in exchange’. In the vast majority of systems and societies across the globe the commodity we exchange is money. There are, however, a considerable number of communities where ‘barter’ economies still exist and therefore where other commodities, such as animals, are exchanged for what the ‘purchaser’ wants.
In daily parlance we generally refer to the value of goods or services as the price: the quantity of money (or another commodity) that has to be exchanged for the goods or service. With technologies, as with other manufactured artefacts, the starting point for defining price is usually based on the ‘real’ or estimated cost of the materials, labour, expertise and so on that are used to manufacture the ‘product’, plus additional sums for carriage, packaging and advertising, and mark-up for the producer, supplier, retailer, and so on. Of course, in free-market economies this is only half the story, as the essential elements of a market are actually the behaviour of buyers and sellers and the ways in which they interact. This may be rational, but equally, it may not. What should be obvious is that if a significant factor in defining price is human behaviour then what the price of a product or service is, and thus its value, becomes a far more slippery concept than it might seem.
The second meaning of value is usually referred to as ‘value in use’: the total utility that is yielded by a good or service. The crucial concept here is that utility means: ‘The satisfaction, pleasure or fulfilment of needs derived from consuming some quantity of a good’ (Bannock et al., 1984, p. 444). Here again we have a human dimension to value – this time based on a number of factors that are very largely subjective because they rely on individual views and opinions. In short, unpacking the meanings of value illustrates clearly that it is not an entirely, or even mainly, objective concept.
Although I’ve explained the two dimensions of value in terms of their relevance to individuals, the same principles can be applied to groups and populations. Hence in an organisational context, utility simply scales up to groups (of whatever size) and their collective views and opinions on the utility yielded to them by, for example, a CCTV system.
As we have previously discussed with reference to projects and programmes, regardless of whether we are analysing value and utility from an individual or group perspective, even the most rational of evaluation procedures cannot avoid questions of personal or social values. This is because the identification, selection and weighting of criteria for defining value in a particular context and at a specific point in time are in large part value-laden judgements. Consequently, judgements may vary between different people or groups, and also the values of a person or group may change over time. Sometimes even quite radical shifts can occur in values (and thus in what is defined as valued) as people become aware of environmental, technological, political or other issues that arise from purchase decisions they had not been aware of previously. Some of the previous activities and exercises should have already reinforced this point for you.
This has two important implications for evaluation. First, different people and groups may suggest completely different sets of criteria for evaluating the same technology or product. Second, the value ascribed to a product or technology may vary between people, groups or within society generally. The result is that when undertaking an evaluation it is necessary to identify the particular set of choice and value factors that are regarded as appropriate by the relevant decision-maker or stakeholder(s). This, however, raises another fundamental issue that has to be faced when the value of a technology investment or project or programme is being defined: is it possible to know what the choice and value factors – the benefits and costs – actually are?
Identify two or three examples of increased awareness of environmental, technological, political or other factors leading to a significant shift in the values (i.e. views and opinions) of large groups of people that have then fed through into changes in technology purchase decisions.
One of the most obvious, and one that most people would probably pick, is climate change. Although by no means a uniform trend across all sectors of society and in all countries, concern with global warming and the need to reduce carbon emissions is influencing a range of purchase decisions, from cars, through central-heating boilers, to light bulbs.
Another example I’d highlight would be increased awareness of the injuries that can be caused by road accidents and how these can be ameliorated. In Europe this has led to an increase in the desirability of cars with high Euro Ncap (new car assessment programme) ratings. Manufacturers whose vehicles score highly use this as a marketing feature.
My third example would be mobile (or wireless) communications and computing, something that is all around us now, but which was virtually unheard of before the mid-1990s. Initially driven by business and commerce, it was rapidly adopted as a lifestyle statement, and a generation has adapted its purchasing decisions to take account of these technological developments, to the extent that it would be hard to imagine a society without them.