Measuring the Impact of Free Goods on Real Household Consumption
- (pp. 25-30)
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.Citation
Brynjolfsson, Erik, Avinash Collis, W. Erwin Diewert, Felix Eggers, and Kevin J. Fox. 2020. "Measuring the Impact of Free Goods on Real Household Consumption." AEA Papers and Proceedings, 110: 25-30. DOI: 10.1257/pandp.20201054Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- E01 Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- E23 Macroeconomics: Production