What is the economic value of the internet?

May 26, 2011 5:25 AM

The McKinsey Global Institute has published "Internet Matters: The Net's sweeping impact on growth, jobs, and prosperity" [70 Page PDF or just the Summary]. "On average, the Internet contributes 3.4 percent to GDP in the 13 countries covered by the research an amount the size of Spain or Canada in terms of GDP, and growing at a faster rate than that of Brazil... For governments, investments in infrastructure, human capital, financial capital and business environment conditions will help strengthen their Internet supply domestic ecosystems." Found on Marginal Revolution where Tyler Cowen has a few interesting comments.
posted by Blake (8 comments total)

In the United States, for example, research conducted with the Interactive Advertising Board found that consumers placed a value of almost €61 billion on the services they got from the Internet, while they would pay about €15 billion to get rid of the annoyances, suggesting a net consumer surplus of about €46 billion.

Interesting. I wonder how they ask the question. "How much would you pay, maximum, for the internet" vs. "how much would we have to pay you to abstain from the internet entirely for a year" seems like you'd get different figures, but economically they should be the same.
posted by delmoi at 5:42 AM on May 26, 2011 [1 favorite]

If he's promoting succession, I think I could get behind the $5 bucks for the right to comment under Ell Presidente Matt. Heck, we already have IDs, why not a passport?
posted by Nanukthedog at 5:43 AM on May 26, 2011

What are the proposed drug policies in the Republic of Metafilter?
posted by Samuel Farrow at 6:07 AM on May 26, 2011

seems like you'd get different figures, but economically they should be the same.

I'm not sure those are quite the same thing. No matter how much I love the internet (and boy do I love the internet) I would first choose to allocate my finite resources to food and shelter. Whereas I could in theory demand a much higher price from society to abstain from it. (Email in profile if you want to make an offer.)
posted by Horace Rumpole at 6:51 AM on May 26, 2011

"How much would you pay, maximum, for the internet" measures willingness to pay (WTP), while "how much would we have to pay you to abstain from the internet entirely for a year" measures willingness to accept (WTA). WTP and WTA are usually used when trying to valuate public goods, that is, when there is no market that can determine the price. While theoretically WTP and WTA should not differ greatly, various experiments have found that WTA is usually substantially higher than WTP. Horace Rumpole nails one big reason for this disparity.

(There's a large body of literature in economics analyzing the WTP-WTA disparity, as well as what these are actually measuring, if anybody is nterested in learning more)
posted by research monkey at 7:26 AM on May 26, 2011 [1 favorite]

What are the proposed drug policies in the Republic of Metafilter?

Do you really have to ask?
posted by thsmchnekllsfascists at 8:19 AM on May 26, 2011

The sheer sweepingness of the internet gets scary when you think that the whole thing balances on the point of our shaky power grid. In August 2003, a tree branch (not far from my house) fell on a power line and knocked out 55 million people from Ontario to Southern New Jersey. The same thing could happen tomorrow -- not to mention all sorts of other things people talk about (but I try not to pay attention to) like solar flares and stratospheric bursts. How much would you pay to get the internet back then?
posted by Faze at 8:49 AM on May 26, 2011 [1 favorite]

What are the proposed drug policies in the Republic of Metafilter?

Mandatory mushrooms.
posted by delmoi at 5:16 PM on May 26, 2011 [1 favorite]