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The Value of the Internet for Consumers

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Abstract

Several studies have examined the market value of paid-for internet services and internet access. This paper estimates the value of leisure time spent online for which the consumer pays no monetary price and which has become increasingly important as a leisure activity. We apply a methodology developed be Goolsbee and Klenow (2006), which relies on differences in time spent online and opportunity cost of time, to an internet users clickstream dataset for the five largest economies in the European Union (Germany, United Kingdom, France, Italy and Spain). We find that, according to our most conservative measure, leisure time spent on the internet generated a consumer surplus of between 0.6 and 1% of full income in 2011 in the countries studied. The total consumer surplus for each country amounted to between 18 billion euros (Italy) and 44 billion euros (Germany).

Suggested Citation

  • Smaranda Pantea & Bertin Martens, 2014. "The Value of the Internet for Consumers," JRC Working Papers on Digital Economy 2014-08, Joint Research Centre.
    • Handle: RePEc:ipt:decwpa:2014-08
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    File URL: https://joint-research-centre.ec.europa.eu/reports-and-technical-documentation/value-internet-consumers_en
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    References listed on IDEAS

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    3. Smaranda Pantea, 2014. "Has the digital divide been reversed? – Evidence from five EU countries," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 11(1), pages 13-42, December.
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    Cited by:

    1. Sobolewski, Maciej, 2021. "Measuring consumer well-being from using free-of-charge digital services. The case of navigation apps," Information Economics and Policy, Elsevier, vol. 56(C).

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    More about this item

    Keywords

    Internet Services; Consumer Surplus; Leisure.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D6 - Microeconomics - - Welfare Economics
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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