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

Erik Brynjolfsson, Avinash Collis, W. Erwin Diewert, Felix Eggers and Kevin J. Fox

American Economic Journal: Macroeconomics, 2025, vol. 17, issue 4, 312-44

Abstract: The welfare contributions of new goods and free goods are not well-measured in standard statistical agency metrics like GDP or productivity. We derive explicit terms for the contributions of these goods and introduce a new framework and metric, GDP-B, which quantifies their benefits. We apply this framework to several empirical examples, including Facebook and smartphone cameras, and estimate their valuations through incentive-compatible choice experiments. Our new approach can help measure welfare changes over time and reveal which goods and innovations contribute the most to economic growth and well-being.

JEL-codes: D13 E01 E23 O30 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmac:v:17:y:2025:i:4:p:312-44

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DOI: 10.1257/mac.20210319

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