IDEAS home Printed from https://ideas.repec.org/a/aea/apandp/v110y2020p25-30.html

Measuring the Impact of Free Goods on Real Household Consumption

Author

Listed:
  • Erik Brynjolfsson
  • Avinash Collis
  • W. Erwin Diewert
  • Felix Eggers
  • Kevin J. Fox

Abstract

We suggest a methodology that allows statistical agencies to form approximations to the benefits that flow to households from new free goods. The present production-oriented GDP measures are not satisfactory for measuring real household consumption and will be increasingly inaccurate as free goods, such as those made possible by the digital revolution, become more important. Advertising expenditures are not an adequate substitute for measuring the benefits of new goods to the household sector. Instead, we need to draw on estimates such as those provided by choice experiments.

Suggested Citation

  • Erik Brynjolfsson & Avinash Collis & W. Erwin Diewert & Felix Eggers & Kevin J. Fox, 2020. "Measuring the Impact of Free Goods on Real Household Consumption," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 25-30, May.
    • Handle: RePEc:aea:apandp:v:110:y:2020:p:25-30
    DOI: 10.1257/pandp.20201054
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/pandp.20201054
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/pandp.20201054.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/pandp.20201054?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arvai Kai & Mann Katja, 2022. "Consumption Inequality in the Digital Age," Working papers 890, Banque de France.
    2. Leonard I. Nakamura, 2020. "Evidence of Accelerating Mismeasurement of Growth and Inflation in the U.S. in the 21st Century," Working Papers 20-41, Federal Reserve Bank of Philadelphia.
    3. Mattsson, Pontus & Reshid, Abdulaziz, 2023. "Productivity divergence and the role of digitalisation," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 942-966.
    4. Diane Coyle & David Nguyen, 2020. "Free goods and economic welfare," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2020-18, Economic Statistics Centre of Excellence (ESCoE).
    5. Diane Coyle & Annabel Manley, 2021. "Potential social value from data: an application of discrete choice analysis," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2021-17, Economic Statistics Centre of Excellence (ESCoE).
    6. Coyle, Diane & Hampton, Lucy, 2024. "21st century progress in computing," Telecommunications Policy, Elsevier, vol. 48(1).
    7. Diane Coyle & Leonard Nakamura, 2022. "Time Use, Productivity, and Household-centric Measurement of Welfare in the Digital Economy," International Productivity Monitor, Centre for the Study of Living Standards, vol. 42, pages 165-186, Spring.
    8. W. Erwin Diewert & Kevin J. Fox, 2020. "Measuring Real Consumption and CPI Bias under Lockdown Conditions," NBER Working Papers 27144, National Bureau of Economic Research, Inc.
    9. Sohn, Seuk Min, 2025. "Effortlessness as the measurement of the impact of artificial intelligence (AI) adoption and innovation: Towards the theory of relative AI," Technology in Society, Elsevier, vol. 83(C).
    10. Xavier Jaravel, 2021. "Inflation Inequality: Measurement, Causes, and Policy Implications," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 599-629, August.
    11. Cusolito,Ana Paula & Lederman,Daniel & Pena,Jorge O., 2020. "The Effects of Digital-Technology Adoption on Productivity and Factor Demand : Firm-level Evidence from Developing Countries," Policy Research Working Paper Series 9333, The World Bank.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:apandp:v:110:y:2020:p:25-30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.