Review of Douglas Hubbard's

Abstract

This article summarizes Douglas Hubbard’s book, “How to Measure Anything”, which offers a practical approach to making better business decisions in the face of uncertainty. The article focuses on Hubbard’s method of “Applied Information Economics” (AIE), which consists of five steps: 1) defining a decision problem and relevant variables; 2) determining what is known about these variables; 3) computing the value of additional information for each variable; 4) applying the most valuable measurement instrument(s); and 5) making a decision based on the reduced uncertainty. The article outlines each step in detail, explaining concepts such as expected opportunity loss, expected value of information, measurement inversion, and common measurement errors. In addition, the article explores various sampling methods, including mathless estimation, catch-recatch, spot sampling, clustered sampling, and measure-to-the-threshold techniques. Finally, the article concludes by describing the three phases of Hubbard’s consulting process, which employs the AIE method to guide clients towards more informed decisions. – AI-generated abstract