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For several decades, gross domestic product (GDP), a sum of the value of purchased goods, has been a ubiquitous yardstick of economic activity. More recently, some observers have suggested that GDP falls short because it doesn't include the value of free online goods such as social media, search engines, maps, videos, and more.
A new study by MIT researchers puts a dollar value on all those free digital goods people use, and builds the case that online activity can and should become part of GDP some day.
Instance - Facebook - Month - US - Consumers
For instance, Facebook is worth about $40 to $50 per month for U.S. consumers, according to a series of surveys the researchers conducted. In Europe, digital maps on phones are valued at 59 euros (currently about $67) per month. And the free messaging tool WhatsApp, used most widely outside the U.S., is worth a whopping 536 euros ($611) per month, the survey indicates.
"The magnitude of the numbers was really striking," says Avinash Collis, a doctoral candidate in information technologies at the MIT Sloan School of Management, who helped develop the new study.
Scholars - Paper - Results - Goods - Gains
Or, as the scholars write in a new paper summarizing the results, "digital goods have created large gains in well-being that are not reflected in conventional measures of GDP and productivity."
The paper, "Using massive online choice experiments to measure changes in well-being," appears today in Proceedings of the National Academy of Sciences. In addition to Collis, the authors are Erik Brynjolfsson, the Schussel Family Professor of Management at MIT Sloan, and Felix Eggers, an assistant professor of economics at the University of Gronigen in the Netherlands.
Study - Researchers - Online - Surveys - Consumers
To conduct the study, the researchers used three large-scale online surveys in which consumers were asked to put a price tag on the free online services they consume. In many cases, respondents were asked whether they would prefer to...
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