Measuring consumer well-being from using free-of-charge digital services. The case of navigation apps

Maciej Sobolewski

Information Economics and Policy, 2021, vol. 56, issue C

Abstract: The number of active users of digital maps and navigation applications has exceeded a billion worldwide. As these apps are predominantly free of charge, their contribution to consumer well-being cannot be measured using common economic indicators, like GDP. The present study measures, in an economically consistent way, consumer surplus from a navigation service. The preferences for the navigation service and two optional location-based functionalities: traffic information and commercial information are elicited in a discrete choice experiment. In the experiment, respondents are confronted with a range of location-sharing arrangements set by a navigation provider of varying intrusiveness regarding privacy. Median consumer surplus from using satellite-only navigation without location-based functionalities is estimated at EUR 8.06 per month. Adding location-based services increases this gain by 36% to EUR 10.98, provided that data sharing is arranged on non-intrusive, user-centric terms. Both location-sharing conditions set by providers and privacy concerns of users affect the surplus size gained from using free navigation applications.

Keywords: Zero price goods; navigation apps; digital maps; discrete choice experiment; consumer surplus; online privacy (search for similar items in EconPapers)
JEL-codes: C25 D12 L51 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Measuring consumer well-being from using zero price digital services: The case of navigation apps and location-based services (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:56:y:2021:i:c:s0167624521000135

DOI: 10.1016/j.infoecopol.2021.100925

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