Working Paper: NBER ID: w31670
Authors: Erik Brynjolfsson; Avinash Collis; Asad Liaqat; Daley Kutzman; Haritz Garro; Daniel Deisenroth; Nils Wernerfelt; Jae Joon Lee
Abstract: Digital goods can generate large benefits for consumers, but these benefits are largely unmeasured in the national accounts, including GDP and productivity. In this paper, we measure welfare gains from 10 popular digital goods across 13 countries by conducting large-scale incentivized online choice experiments on representative samples of nearly 40,000 people. We estimate that these goods—many of which are free to users—generate over $2.5 trillion in aggregate consumer welfare across these countries per year, which is roughly equivalent to 6% of their combined GDP. We find that lower-income individuals and lower-income countries obtain relatively larger welfare gains from these goods compared to higher-income individuals and countries. This suggests that digital goods may reduce inequality in welfare within and across countries by disproportionately benefiting lower-income groups.
Keywords: digital goods; welfare gains; inequality; consumer surplus; digital economy
JEL Codes: O30; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| consumption of digital goods (D16) | welfare gains (D69) |
| consumption of digital goods (D16) | reduction of inequality in welfare (I14) |
| availability of free digital goods (L17) | reduction of inequality (I14) |
| lower-income individuals and countries (F63) | larger welfare gains from digital goods (D69) |