{"id":43130,"date":"2018-04-19T05:00:40","date_gmt":"2018-04-19T09:00:40","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=43130"},"modified":"2018-04-18T10:29:32","modified_gmt":"2018-04-18T14:29:32","slug":"the-mis-measurement-of-the-digital-economy","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2018\/04\/19\/the-mis-measurement-of-the-digital-economy\/","title":{"rendered":"The mis-measurement of the digital economy"},"content":{"rendered":"<p>In the <em>Continental Telegraph<\/em>, <a href=\"http:\/\/www.continentaltelegraph.com\/2018\/04\/18\/whatsapp-is-in-gdp-as-a-reduction-in-productivity\/\" rel=\"noopener\" target=\"_blank\">Tim Worstall<\/a> explains why our current statistical model does not adequately reflect the online world&#8217;s contribution to our economy:<\/p>\n<blockquote><p>To give my favourite current example. WhatsApp is used by some billion people around the world for some to all of their telecoms needs. It turns up in economic statistics as a reduction in productivity.<\/p>\n<p>That\u2019s mad.<\/p>\n<p>In more detail, WhatsApp is free to use and carries no advertising. That means there\u2019s no sale associated with it. We measure consumption at market prices \u2013 a price of $0 means no consumption. Consumption is one of the three ways we measure GDP \u2013 each of the three should be the same as the other two but isn\u2019t because lying about taxes.<\/p>\n<p>The other two calculations are all incomes, or all production. Things that are sold at no price do not add to production given that we measure it at market prices.<\/p>\n<p>Income, well, there\u2019re 200 or so engineers at Facebook who work on it (I checked with Facebook itself). Say their salary is $250k a year each. Probably too low but we\u2019ve got to use some number or other. $50 million then. That\u2019s incomes added to GDP.<\/p>\n<p>So, in our three methods of calculating GDP \u2013 they should all be the same but that doesn\u2019t matter here \u2013 we\u2019ve value of WhatsApp (more accurately, WhatsApp adds value of $x each year to the global economy) of $50 million. Or $0 or $0.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>In the Continental Telegraph, Tim Worstall explains why our current statistical model does not adequately reflect the online world&#8217;s contribution to our economy: To give my favourite current example. WhatsApp is used by some billion people around the world for some to all of their telecoms needs. It turns up in economic statistics as a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,15],"tags":[391,1094,58,547,290],"class_list":["post-43130","post","type-post","status-publish","format-standard","hentry","category-economics","category-technology","tag-facebook","tag-gdp","tag-internet","tag-smartphones","tag-statistics"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-bdE","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/43130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=43130"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/43130\/revisions"}],"predecessor-version":[{"id":43131,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/43130\/revisions\/43131"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=43130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=43130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=43130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}