The Economic Effects of Facebook

55 Pages Posted: 19 Jan 2019 Last revised: 12 Mar 2019

See all articles by Roberto Mosquera

Roberto Mosquera

Texas A&M University - Department of Economics

Mofioluwasademi (Moffii) Odunowo

Texas A&M University - Department of Economics

Trent McNamara

Texas A&M University - Department of Economics

Xiongfei Guo

Texas A&M University - Department of Economics

Ragan Petrie

Texas A&M University - Department of Economics; University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Date Written: February 2019

Abstract

Social media permeates many aspects of our lives, including how we connect with others, where we get our news and how we spend our time. Yet, we know little about the economic effects for users. In 2017, we ran a large field experiment with over 1,765 individuals to document the value of Facebook to users and its causal effect on news consumption and awareness, well-being and daily activities. Participants reveal how much they value one week of Facebook usage and are then randomly assigned to a validated Facebook restriction or normal use. Those who are off Facebook for a week reduce news consumption, are less likely to recognize politically-skewed news stories, report being less depressed and engage in healthier activities. One week of Facebook is worth $67, and this increases by 19.6% after experiencing a Facebook restriction (33% for women), reflecting information loss or that using Facebook may be addictive.

Keywords: Social Media, Field Experiment, Value of Facebook, News Awareness, Well-Being, Gender

JEL Classification: C93, D91, D83, I31

Suggested Citation

Mosquera, Roberto and Odunowo, Mofioluwasademi and McNamara, Trent and Guo, Xiongfei and Petrie, Ragan, The Economic Effects of Facebook (February 2019). Available at SSRN: https://ssrn.com/abstract=3312462 or http://dx.doi.org/10.2139/ssrn.3312462

Roberto Mosquera

Texas A&M University - Department of Economics ( email )

4228 TAMU
College Station, TX 77843-4228
United States

Mofioluwasademi Odunowo

Texas A&M University - Department of Economics ( email )

4228 TAMU
College Station, TX 77843-4228
United States

Trent McNamara

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

Xiongfei Guo

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

Ragan Petrie (Contact Author)

Texas A&M University - Department of Economics ( email )

4228 TAMU
College Station, TX 77843-4228
United States

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

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