Summary of Facebook is free, but should it count toward GDP anyway?

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Facebook is free, but should it count toward GDP anyway? summary
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Measures of gross domestic product gauge the monetary value of a nation’s economic output of most good and services, but not all of them. Free online services, like those of Facebook, Gmail and YouTube, create meaningful value that individuals prize – and price – highly, according to journalist Peter Dizikes in this concise overview of current research on the topic. He writes that society needs a better way of understanding how technology is adding to people’s economic well-being. Econometricians, it would seem, have their work cut out for them, as this brief but thought-provoking piece makes clear.

About the Author

Peter Dizikes is a writer for the MIT News Office.



Gross domestic product measures only the prices paid for goods and services.

GDP is “a sum of the value of purchased goods.” But experts have begun to question its adequacy as a macroeconomic metric because it fails to capture the worth of free online tools like email, social media and streaming services. Some 65,000 consumers responded to three exploratory online surveys from MIT researchers that asked how much users would accept in compensation for no longer having access to those services. The results were startling.

Free online services’ contributions...

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