MIT Sloan School of Management
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Cambridge, MA 02142
NBER Working Papers and Publications
|April 2018||Using Massive Online Choice Experiments to Measure Changes in Well-being|
with Erik Brynjolfsson, Felix Eggers: w24514
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 compensa...