The Value of the Internet

Researchers are attempting to quantify the benefit that people receive from the internet in the article ‘Net Benefits.’ They measure this benefit in consumer surplus – what the consumer is willing to pay for internet services minus what they actually pay. In class, we have discussed this benefit in the form of payoff, and the price the consumer is willing to pay as the consumer’s value for the service.

The benefits that consumers receive through the internet are varied, and not all of them are quantifiable. The wealth of knowledge available through just a few clicks of a mouse help people immensely every day, but a dollar value cannot be placed on this kind of information. However, other payoffs can be measured, such as the surplus that a buyer receives when he buys something online at a lower price than he is willing to pay for it. The wide array of available products at varying prices make this process far easier than the act of physically traveling to locate a desired good.

Several researchers also performed a survey to see how much the average internet user would pay for services – such as social networking sites and search engines – that are now free and run by ad income. The average consumer responded that they would spend $50 per month for these services, indicating an immense consumer surplus from internet services that are completely free.

However, it is also important to look at the detrimental effects of the internet. While the internet saves a great deal of time on average through its convenience, it also wastes a great deal of time when people dedicate their leisure time to the internet rather than other pursuits. It also detracts from human interaction. These factors cannot be quantified, but that does not mean that they are any less important than internet benefits.

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2 thoughts on “The Value of the Internet”

  1. This is a really elusive concept, but I’m glad someone is tackling it. Quantifying consumer surplus is difficult for the Internet for various reasons. Is it just internet service? What about other services paid for online like Netflix or Amazon? And what about all of the ways people have around paying for things on the Internet? I understand that much of this utility is compartmentalized in monetary value; however I think its time we start looking at new ways to evaluate utility.

  2. This really intrigued me. Would I value the ability to research the mind of every other human being on the planet at $50? of course. Should I have to pay for education? I do not believe so. All systems that require input users should never charge because they are the product of the users.
    G.Vas

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