Using Massive Online Choice Experiments to Measure Changes in Well-Being

75 Pages Posted: 24 Apr 2018 Last revised: 26 Jun 2021

See all articles by Erik Brynjolfsson

Erik Brynjolfsson

National Bureau of Economic Research (NBER); Stanford

Felix Eggers

University of Groningen

Avinash Collis

University of Texas at Austin - Red McCombs School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: April 2018

Abstract

GDP and derived metrics (e.g., productivity) have been central to understanding economic progress and well-being. In principle, the change in consumer surplus (compensating expenditure) provides a superior, and more direct, measure of the change in well-being, especially for digital goods, but in practice, it has been difficult to measure. We explore the potential of massive online choice experiments to measure consumers’ willingness to accept compensation for losing access to various digital goods and thereby estimate the consumer surplus generated from these goods. We test the robustness of the approach and benchmark it against established methods, including incentive compatible choice experiments that require participants to give up Facebook for a certain period in exchange for compensation. The proposed choice experiments show convergent validity and are massively scalable. Our results indicate that digital goods have created large gains in well-being that are missed by conventional measures of GDP and productivity. By periodically querying a large, representative sample of goods and services, including those which are not priced in existing markets, changes in consumer surplus and other new measures of well-being derived from these online choice experiments have the potential for providing cost-effective supplements to existing national income and product accounts.

Suggested Citation

Brynjolfsson, Erik and Eggers, Felix and Collis, Avinash, Using Massive Online Choice Experiments to Measure Changes in Well-Being (April 2018). NBER Working Paper No. w24514, Available at SSRN: https://ssrn.com/abstract=3163281

Erik Brynjolfsson (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Stanford ( email )

366 Galvez St
Stanford, CA 94305
United States

HOME PAGE: http://brynjolfsson.com

Felix Eggers

University of Groningen

Avinash Collis

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX
United States

HOME PAGE: http://www.avinash.info

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