GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy

Erik Brynjolfsson, Avinash Collis, Walter Diewert, Felix Eggers and Kevin Fox

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: The welfare contributions of the digital economy, characterized by the proliferation of new and free goods, are not well-measured in our current national accounts. We derive explicit terms for the welfare contributions of these goods and introduce a new metric, GDP-B which quantifies their benefits, rather than costs. We apply this framework to several empirical examples including Facebook and smartphone cameras and estimate their valuations through incentive-compatible choice experiments. For example, including the welfare gains from Facebook would have added between 0.05 and 0.11 percentage points to GDP-B growth per year in the US.

Keywords: Welfare measurement; GDP; Productivity; mismeasurement; productivity slowdown; new goods; free goods; online choice experiments; GDP-B (search for similar items in EconPapers)
JEL-codes: C43 D60 E23 O3 O4 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2019-03-27, Revised 2019-03-27
New Economics Papers: this item is included in nep-eff, nep-ict, nep-ind and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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Related works:
Working Paper: GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy (2019)
Working Paper: GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy (2019)
Working Paper: GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:erwin_diewert-2019-6

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