Gillian Tett at the Financial Times: How big is the impact of Facebook on our lives? That question has caused plenty of hand-wringing this year, as revelations have tumbled out about the political influence of Big Tech companies.
Economists are attempting to look at this question too — but in a different way. They have been quietly trying to calculate the impact of Facebook on gross domestic product data, ie to measure what our social-media addiction is doing to economic output….
Kevin Fox, an Australian economist, thinks there is. Working with four other economists, including Erik Brynjolfsson, a professor at MIT, he recently surveyed consumers to see what they would “pay” for Facebook in monetary terms, concluding conservatively that this was about $42 a month. Extrapolating this to the wider economy, he then calculated that the “value” of the social-media platform is equivalent to 0.11
Back in 2000, as the group points out, about 80 billion photos were taken each year at a cost of 50 cents a picture in camera and processing fees. This was recorded in GDP. Today, 1.6 trillion photos are taken each year, mostly on smartphones, for “free”, and excluded from that GDP data. What would happen if that was measured too, along with other types of digital services?
The bad news is that there is no consensus among economists on this point, and the debate is still at a very early stage. … A separate paper from Charles Hulten and Leonard Nakamura, economists at the University of Maryland and Philadelphia Fed respectively, explained another idea: a measurement known as “
Yet another paper from Nakamura, co-written with Diane Coyle of Cambridge University, argued that we should also reconfigure the data to measure how we “spend” our time, rather than “just” how we spend our money. “To recapture welfare in the age of