Valuing online choices can aid policymakers’ decisions

Subject

Quantifying digital consumption.

Significance

On May 30, New Zealand will issue its first ‘wellbeing budget’, accounting for financial, natural, human and social capital, not just economic and fiscal measures. Economists, policymakers and politicians have used GDP as a proxy for wellbeing, although digital technologies generate large amounts of economic wellbeing that GDP cannot properly capture as it measures output rather than outcomes and misses the economic benefits of zero-priced goods and services, such as internet search. New research shows that it is possible to measure economic wellbeing by conducting large-scale online choice experiments in which respondents are given a choice between keeping access to a good and giving it up in exchange for monetary compensation.

Impacts

• Search engines, email and maps are ingrained in work and leisure and will continue creating the most digital user value in the near term.
• Mass online choice surveys will be used more widely to understand consumer value; this could enhance the efficiency of public investment.
• Adapting online choice surveys to regional variation in incomes, preferences and digitalisation will enable them to be compared globally.
• Measuring tech progress better may well suggest productivity is underestimated, but some digital activities create consumer deficit.