$40-$50 per month?
Brynjolfsson and al. explore by how much well-being has changed from the use of digital goods. In particular, in order to measure the consumer surplus of Facebook they asked consumers if they would prefer to:
- Keep access to the Facebook; or
- Give up Facebook for one month in return for a payment of $E.
The results indicate that Facebook provides substantial value to consumers who would require a median compensation of about $40-$50 per month for leaving this service. They argue that their results indicate that digital goods have created large gains in well-being that are missed by conventional measures of GDP and productivity.
Using Massive Online Choice Experiments to Measure Changes in Well-being
Authors: Erik Brynjolfsson, Felix Eggers, Avinash Gannamaneni
From: MIT, University of Groningen
Allcott and al. apply a similar experiment and find that for their sample the median and mean compensation needed to deactivate Facebook for 1 to 4 weeks were $100 and $180, respectively. They went further in their analysis and found that Facebook deactivation:
- Reduced online activity, including other social media, while increasing offline activities such as watching TV alone and socializing with family and friends;
- Reduced both factual news knowledge and political polarization;
- Increased subjective well-being; and
- Caused a large persistent reduction in Facebook use after the experiment!
The Welfare Effects of Social Media
Authors: Hunt Allcott, Luca Braghieri, Sarah Eichmeyer, and Matthew Gentzkow
From: New York University, Stanford University