How Much GDP Is Facebook Worth?

By Mike Bird 

Some social media users joke that they would pay money to be able to give it up. But if the benefit consumers derive from Facebook were included in national accounts, it would have added tens of billions of dollars a year to gross domestic product, new research suggests.

A group of economists, including MIT's Erik Brynjolfsson, think the social-media pioneer would have boosted U.S. economic growth by between 0.05 and 0.11 percentage points a year under GDP-B, a measure of output that factors in the use of free services.

The analysis is based in part on how much money a polling sample of U.S. users of the site would need to be paid to give it up for one month, which came out at a median level of $42.17. Scaled up to the population of U.S. Facebook users and spread over the period since the company was founded in 2003, that works out at a $231 billion increase in welfare.

The political rants of distant cousins and carefully curated selfies of former classmates may be more valuable than they first appear.

Write to Mike Bird at [e-mail]

(END) Dow Jones Newswires

April 03, 2019 10:19 ET (14:19 GMT)

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