Data, information and knowledge: Have we got it right?

Economists make the unarticulated assumption that information is something that stands apart from and is independent of processors of information and their inherent characteristics. We argue that they need to revisit the distinctions they have drawn between data, information and knowledge. While some associate information with data, others associate it with knowledge. But since few readily associate data with knowledge, this suggests too loose a conceptualisation of the term 'information'. We argue that the difference between data, information and knowledge is in fact crucial. Information theory and the physics of information provide us with useful insights with which to build an economics of information appropriate to the needs of the emerging information economy.