The Value of the Internet for Consumers

24 Pages Posted: 8 Jun 2014

See all articles by Smaranda Pantea

Smaranda Pantea

University of Economics, Prague

Bertin Martens

Joint Research Centre

Date Written: June 6, 2014

Abstract

Several studies have examined the market value of paid-for internet services and internet access. This paper estimates the value of leisure time spent online for which the consumer pays no monetary price and which has become increasingly important as a leisure activity. We apply a methodology developed by Goolsbee and Klenow (2006), which relies on differences in time spent online and opportunity cost of time, to an internet users’ clickstream dataset for the five largest economies in the European Union (Germany, United Kingdom, France, Italy and Spain). We find that, according to our most conservative measure, leisure time spent on the internet generated a consumer surplus of between 0.6 and 1% of full income in 2011 in the countries studied. The total consumer surplus for each country amounted to between 18 billion euros (Italy) and 44 billion euros (Germany).

Keywords: online services, internet services, consumer surplus, leisure, free online services

JEL Classification: D12, D6, L86

Suggested Citation

Pantea, Smaranda and Martens, Bertin, The Value of the Internet for Consumers (June 6, 2014). Available at SSRN: https://ssrn.com/abstract=2446962 or http://dx.doi.org/10.2139/ssrn.2446962

Smaranda Pantea

University of Economics, Prague

nam. W.Churchilla 4
Prague 3, 130 67
Czech Republic

Bertin Martens (Contact Author)

Joint Research Centre ( email )

Edificio Expo, C
Inca Garcilaso, s/n
Sevilla, E-41092
Spain

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