There has been a lot of talk about there not being any free service at all in the world. Basically, the argument is that we do get free services from the likes of Google and Facebook but they are not free in the sense that we do give our data to them. Therefore, a lot of studies have been conducted to see how much free service is worth to people around the world. Also, the impact of free service on an economy has also been examined.
Now, the Federal Reserve in the US has joined in on this debate. According to a report by the CNBC, the Fed is trying to figure out how much free internet services are worth to the economy. The report mentions that if the answer is found, it could help the central bank solve one of the most puzzling paradoxes of the modern economy. It is known that the productivity gains have been weak and GDP growth is not stellar despite the fact that current expansion is longest in history.
Fed Chairman Jerome Powell raised the possibility that the problem is with the data itself in a speech this week. He said that the measurement of GDP is done on the basis of the value of products and services that are bought and sold. However, we have seen that the greatest technological innovations of the internet age are free. For example, we have Search engines, e-mail, GPS and services like Facebook and Twitter which are free to use. Powell added that “Good decisions require good data, but the data in hand are seldom as good as we would like,”.
According to a survey, a month’s usage of Snapchat was valued at about 2.17 euros. LinkedIn was just 1.52 euros. But people would pay a whopping 536 euros to use WhatsApp for a month while they were happy to give up Twitter for free.