How Much is the Internet Worth to You?

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I’m always a little unsure whether McKinsey reports are just nicely formatted collections of bollocks or genuine sources of useful information. I guess it probably depends on the report. In any case, Tyler Cowen points us today to a new McKinsey report that says the internet accounts for 3.4% of GDP in a group of countries that it recently studied (nine rich countries plus the BRICs). Sweden is highest at 6.3% because — well, who knows? They really, really like Angry Birds in Sweden? They lead the globe in hosting pirate sites? I’m not sure. The United States is about average for rich countries at 3.8%.

However, we value the internet pretty highly here. As this chart shows, the internet generates consumer surplus in the U.S. of about 19 euros per month per person, or a little over $300 per year. But that’s just the average. If you’re reading this blog, you probably value it quite a bit higher:

In general, this surplus is generated from the exceptional value users place on Internet services such as e-mail, social networks, search facilities, and online reservation services, among many others. This value far outweighs the costs, both actual costs such as access and subscription fees and annoyances such as spam, excessive advertising, and the need to disclose personal data for some services. In the United States, for example, research conducted with the Interactive Advertising Board 13 found that consumers placed a value of almost €61 billion on the services they got from the Internet, while they would pay about €15 billion to get rid of the annoyances, suggesting a net consumer surplus of about €46 billion.

So there you have it: Value of internet – cost of internet – annoyances of internet = €46 billion. But I wonder if they also accounted for the stupendous amount of time we all spend trying to fix the internet when it breaks? More comments from Tyler here.

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REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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