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The Economics of PSI:a Policy-Oriented Analysis                                                                 Raimondo I...
Items discussed●    Economic nature of PSI●    Upstream features●    Downstream features●    Costs vs benefits            ...
Items discussed●    Economic nature of PSI●    Upstream features●    Downstream features●    Costs vs benefits            ...
Three assumptions            LAPSI 4th Conference, Turin 9th of July 2012
Three assumptions1) PSI holds recurrent features of digital  information goods + further characteristics;                 ...
Three assumptions1) PSI holds recurrent features of digital  information goods + further characteristics2) Need to separat...
Three assumptions1) PSI holds recurrent features of digital  information goods + further characteristics;2) Need to separa...
PSI in the digital environment•    Non-rival in consumption (access + reuse)•    Hardly excludable (and with ex-ante and e...
PSI in the digital environment•    Non-rival in consumption (access + reuse)•    Hardly excludable (and with ex-ante and e...
PSI in the digital environment•    Non-rival in consumption (access + reuse)•    Hardly excludable (and with ex-ante and e...
Currently, PSI is made available as...•    A public good    --> Open Data platforms                    LAPSI 4th Conferenc...
Currently, PSI is made available as...•    A public good    --> Open Data platforms•    A club good    --> Firm registries...
Currently, PSI is made available as...•    A public good    --> Open Data platforms•    A club good    --> Firm registries...
Items discussed●    Economic nature of PSI●    Upstream features●    Downstream features●    Costs vs benefits            ...
Peculiar cost structure•    Not only marginal costs of reproduction tend to    zero...•    but, more importantly, fixed co...
Peculiar cost structure•    Not only marginal costs of reproduction tend to    zero...•    but, more importantly, fixed co...
Usual (first) steps by a PSIH tomake PSI available for reuse  Activity                                          Main cost ...
Back to the cost structure•    Fixed costs are to be taken for granted.•    To make PSI actually available for reuse:    •...
Items discussed●    Economic nature of PSI●    Upstream features●    Downstream features●    Costs vs benefits            ...
Demand-side•    Strong network effects    ●        the value of a dataset increases the more it is linked or        combin...
PSI as Infrastructure? (cfr. Frischmann) Basic features: 1) significant role of Government (provider, subsidizer, coordina...
PSI as Infrastructure? (cfr. Frischmann) AND: - non rival consumption of its resources; - producing input to downstream ac...
Items discussed●    Economic nature of PSI●    Upstream features●    Downstream features●    Costs vs benefits            ...
Basic situation    A change in the PSI-supply policy of a specific PSIH    holder:•    from a closed and / or paying reuse...
A possible (welfare) approach(cfr. Houghton)•    PSIH net position    •        Annual foregone revenues (-)    •        An...
A possible (welfare) approach(cfr. Houghton)•    PSIH net position    •        Annual foregone revenues (-)    •        An...
A possible (welfare) approach(cfr. Houghton)•    PSIH net position    •        Annual foregone revenues (-)    •        An...
A possible (welfare) approach(cfr. Houghton)•    PSIH net position                                                        ...
After all...  ... benefits are distributed, while costs (and revenues for  PSIH) are localized.  Therefore, when drafting ...
Some examples                                                                 OPENNESS                                    ...
Some examples                                                                 OPENNESS                                    ...
Some examples                                                                 OPENNESS                                    ...
Some examples                                                                 OPENNESS                                    ...
Thank you                                                           Raimondo Iemma                                  Nexa C...
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Economic aspects of Public Sector Information

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  1. 1. The Economics of PSI:a Policy-Oriented Analysis Raimondo Iemma Nexa Center for Internet & Society | EVPSI http://nexa.polito.it LAPSI 4th Conference, Turin 9th of July 2012
  2. 2. Items discussed● Economic nature of PSI● Upstream features● Downstream features● Costs vs benefits LAPSI 4th Conference, Turin 9th of July 2012
  3. 3. Items discussed● Economic nature of PSI● Upstream features● Downstream features● Costs vs benefits LAPSI 4th Conference, Turin 9th of July 2012
  4. 4. Three assumptions LAPSI 4th Conference, Turin 9th of July 2012
  5. 5. Three assumptions1) PSI holds recurrent features of digital information goods + further characteristics; LAPSI 4th Conference, Turin 9th of July 2012
  6. 6. Three assumptions1) PSI holds recurrent features of digital information goods + further characteristics2) Need to separate the inherent features of a good from the attributes of its supply (licensing, pricing, etc.); LAPSI 4th Conference, Turin 9th of July 2012
  7. 7. Three assumptions1) PSI holds recurrent features of digital information goods + further characteristics;2) Need to separate the inherent features of a good from the attributes of its supply (licensing, pricing, etc.);3) The decision agent is the Government (or the PSI holder itself). LAPSI 4th Conference, Turin 9th of July 2012
  8. 8. PSI in the digital environment• Non-rival in consumption (access + reuse)• Hardly excludable (and with ex-ante and ex- post costs)• In some cases, it may be an experience good LAPSI 4th Conference, Turin 9th of July 2012
  9. 9. PSI in the digital environment• Non-rival in consumption (access + reuse)• Hardly excludable (and with ex-ante and ex- post costs)• In some cases, it may be an experience good --> PSI as (potentially) an impure public good LAPSI 4th Conference, Turin 9th of July 2012
  10. 10. PSI in the digital environment• Non-rival in consumption (access + reuse)• Hardly excludable (and with ex-ante and ex- post costs)• In some cases, it may be an experience good --> PSI as (potentially) an impure public good --> What matters is whether and how PSI is available for reuse LAPSI 4th Conference, Turin 9th of July 2012
  11. 11. Currently, PSI is made available as...• A public good --> Open Data platforms LAPSI 4th Conference, Turin 9th of July 2012
  12. 12. Currently, PSI is made available as...• A public good --> Open Data platforms• A club good --> Firm registries (only a few players corresponding a fee can actually reuse PSI de jure) LAPSI 4th Conference, Turin 9th of July 2012
  13. 13. Currently, PSI is made available as...• A public good --> Open Data platforms• A club good --> Firm registries (only a few players corresponding a fee can actually reuse PSI de jure)• Something in between (see e.g. the case of DK addresses explained afterwards) LAPSI 4th Conference, Turin 9th of July 2012
  14. 14. Items discussed● Economic nature of PSI● Upstream features● Downstream features● Costs vs benefits LAPSI 4th Conference, Turin 9th of July 2012
  15. 15. Peculiar cost structure• Not only marginal costs of reproduction tend to zero...• but, more importantly, fixed costs (collection, management, etc.) have already been covered. LAPSI 4th Conference, Turin 9th of July 2012
  16. 16. Peculiar cost structure• Not only marginal costs of reproduction tend to zero...• but, more importantly, fixed costs (collection, management, etc.) have already been covered. --> we do not have to find an efficient way to fund the creation of PSI (as ancillary / incidental good); --> PSI is (almost) available for reuse. LAPSI 4th Conference, Turin 9th of July 2012
  17. 17. Usual (first) steps by a PSIH tomake PSI available for reuse Activity Main cost item 1) Setting the stage Internal coordination Internal education Definition of guidelines 2) Opening a few datasets Small technical costs (usually datasets that do not require any manipulation) 3) Opening more critical datasets Anonymization (where needed) Meaningful metadatation (where needed) LAPSI 4th Conference, Turin 9th of July 2012
  18. 18. Back to the cost structure• Fixed costs are to be taken for granted.• To make PSI actually available for reuse: • empirically, internal coordination costs represent the most relevant item (this is the fixed part of the supply costs); • strong economies of scale emerge; • efficiency curve effects. LAPSI 4th Conference, Turin 9th of July 2012
  19. 19. Items discussed● Economic nature of PSI● Upstream features● Downstream features● Costs vs benefits LAPSI 4th Conference, Turin 9th of July 2012
  20. 20. Demand-side• Strong network effects ● the value of a dataset increases the more it is linked or combined with other datasets (think of Linked Open Data)• PSI as basic input ● centralized knowledge to be combined with local knowledge ● e.g. Apps4Italy: around 50 of the ideas could not be implemented without PSI LAPSI 4th Conference, Turin 9th of July 2012
  21. 21. PSI as Infrastructure? (cfr. Frischmann) Basic features: 1) significant role of Government (provider, subsidizer, coordinator or regulator); 2) traditionally managed as commons (not prioritized); 3) positive externalities. LAPSI 4th Conference, Turin 9th of July 2012
  22. 22. PSI as Infrastructure? (cfr. Frischmann) AND: - non rival consumption of its resources; - producing input to downstream activity; - wide range of (private, public, social) goods downstream. LAPSI 4th Conference, Turin 9th of July 2012
  23. 23. Items discussed● Economic nature of PSI● Upstream features● Downstream features● Costs vs benefits LAPSI 4th Conference, Turin 9th of July 2012
  24. 24. Basic situation A change in the PSI-supply policy of a specific PSIH holder:• from a closed and / or paying reuse;• to an open / free reuse. LAPSI 4th Conference, Turin 9th of July 2012
  25. 25. A possible (welfare) approach(cfr. Houghton)• PSIH net position • Annual foregone revenues (-) • Annual savings (+) / e.g. transaction costs LAPSI 4th Conference, Turin 9th of July 2012
  26. 26. A possible (welfare) approach(cfr. Houghton)• PSIH net position • Annual foregone revenues (-) • Annual savings (+) / e.g. transaction costs• (Re)users savings • No more payment (+) • Time saved (finding material) (+) • Time saved (license enquiries) (+) LAPSI 4th Conference, Turin 9th of July 2012
  27. 27. A possible (welfare) approach(cfr. Houghton)• PSIH net position • Annual foregone revenues (-) • Annual savings (+) / e.g. transaction costs• (Re)users savings • No more payment (+) • Time saved (finding material) (+) • Time saved (license enquiries) (+)• Welfare impact / externalities • Based on ex-ante vs. ex-post reuse indicators LAPSI 4th Conference, Turin 9th of July 2012
  28. 28. A possible (welfare) approach(cfr. Houghton)• PSIH net position In some cases, a positive • Annual foregone revenues (-) balance can be identified even at this stage • Annual savings (+) / e.g. transaction costs• (Re)users savings • No more payment (+) • Time saved (finding material) (+) • Time saved (license enquiries) (+)• Welfare impact / externalities • Based on ex-ante vs. ex-post reuse indicators LAPSI 4th Conference, Turin 9th of July 2012
  29. 29. After all... ... benefits are distributed, while costs (and revenues for PSIH) are localized. Therefore, when drafting policies we should (also) ask ourselves: How do the benefits from PSI have to be allocated / internalized? At what stage of the PSI supply should competition (if any) be actually achieved? Ideally --> at the earliest possible stage. LAPSI 4th Conference, Turin 9th of July 2012
  30. 30. Some examples OPENNESS DEGREE• Typical firm registry: (virtual) competition downstream distributors LAPSI 4th Conference, Turin 9th of July 2012
  31. 31. Some examples OPENNESS DEGREE• Typical firm registry: (virtual) competition downstream distributors• Public transport companies using PSI as bargaining chip with selected complementary players (e.g. maps producers), releasing as open only a small subset of their data. No competition LAPSI 4th Conference, Turin 9th of July 2012
  32. 32. Some examples OPENNESS DEGREE• Typical firm registry: (virtual) competition downstream distributors• Public transport companies using PSI as bargaining chip with selected complementary players (e.g. maps producers), releasing as open only a small subset of their data. No competition• DK address data: once not available as centralized DB, now available to distributors mainly for supply chain reasons but at very small costs (so that double marginalization on users has lower effects); actual competition downstream those distributors LAPSI 4th Conference, Turin 9th of July 2012
  33. 33. Some examples OPENNESS DEGREE• Typical firm registry: (virtual) competition downstream distributors• Public transport companies using PSI as bargaining chip with selected complementary players (e.g. maps producers), releasing as open only a small subset of their data. No competition• DK address data: once not available as centralized DB, now available to distributors mainly for supply chain reasons but at very small costs (so that double marginalization on users has lower effects); actual competition downstream those distributors• Spanish Cadastre: free and open data downloadable in bulk! Actual competition downstream PSIH LAPSI 4th Conference, Turin 9th of July 2012
  34. 34. Thank you Raimondo Iemma Nexa Center for Internet & Society | EVPSI raimondo.iemma@polito.itLAPSI 4th Conference, Turin 9th of July 2012
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