INFINITE JOY

Can the missing value of social media compensate for the apparent productivity growth slowdown in rich countries? The difficulty of course is that we have no idea how much value to assign to these free products.

One problem with this way of getting at the consequences of the internet is that it assumes people have the option of working longer hours for more money instead of spending time on the internet. But this is not true for most people with nine-to-five jobs; instead they need to find ways to keep themselves amused (or at least out of trouble) for another eight hours or so every day. If they spend time on the internet, all this means is they like it more than reading a book or hanging out with friends or family. If they are not particularly sociable and don’t like books, this is hardly a ringing endorsement; it may be worth much less than $3,900.

However, there is also the opposite problem. Take someone who cannot imagine life without the internet, who needs an hour of Twitter fix every morning. That first hour brings almost infinite joy. But by the end of that hour all the enemies have been nailed, and every clever twist of phrase has been processed and passed on. What is left for the second hour is much more ho-hum, so much so that there is never a third hour.

Faced with the possibility that we could be either massively overvaluing the internet or the other way around, scholars looked for other ways to measure its value to consumers. In particular, there were several randomized control trials of what happened when the experimenter (with the permission of the participant) blocked access to Facebook (or social media more generally) for a random group of individuals for some relatively short period of time. The biggest of these experiments, which involved more than two thousand participants paid to deactivate Facebook for a month, found that those who stopped using Facebook were happier across a range of self-reported measures of happiness and well-being and, interestingly, no more bored (perhaps less). They seemed to have found other ways to keep themselves amused, including spending more time with friends and family.²²

When Facebook access was restored after the experiment, those who spent a month without it were slow to return to their Facebook habit, and after several weeks were spending 23 percent less time on the app than they had before the experiment. Consistent with this, the estimate of how much they would need to be paid to give up Facebook for a second month was substantially lower at the end of the first month (after experiencing life without Facebook) than before.

All of this seems very consistent with the view that Facebook is addictive in the sense that it is hard to imagine life without it, but when you do give it up, things are not obviously worse. However, it is interesting that after the month of abstinence, the experimental subjects still wanted to be paid to give up Facebook; they did not simply feel grateful to be rid of it.

How does this square with the fact that getting cut off made people happier on average? In part of course, like all averages, it hides the fact that some people really enjoy Facebook. Moreover, it is likely that what was costly for the participants was in part being the only one among their friends who was now off Facebook, and this inconvenience probably got worse the longer one was absent (it is okay to take a sabbatical from your social connections, but checking out totally is costly). If Facebook did not exist, the problem would not be there.

Where does that leave us? Not quite at a resolution. What we can say with some confidence is that Facebook is not the obvious win for all mankind as its devotees would have it, though people still value it more than they pay for it, at least in the current configuration where all their friends are on Facebook, Instagram, and/or Twitter. Could it be that if we valued these new technologies at their “real value,” growth would appear to be much faster? Probably not, based on the evidence at hand.

What we can say with some confidence is that there is nothing in the available evidence promising a return to the kind of fast growth in measured GDP that characterized the Trente Glorieuses in Europe and the golden years in the United States.