The Welfare Effects of Social Media

122 Pages Posted: 4 Feb 2019 Last revised: 4 Mar 2019

See all articles by Hunt Allcott

Hunt Allcott

New York University (NYU)

Luca Braghieri

Stanford University - Department of Economics

Sarah Eichmeyer

Stanford University - Department of Economics

Matthew Gentzkow

Stanford University

Date Written: January 2019

Abstract

The rise of social media has provoked both optimism about potential societal benefits and concern about harms such as addiction, depression, and political polarization. In a randomized experiment, we find that deactivating Facebook for the four weeks before the 2018 US midterm election (i) reduced online activity, while increasing offline activities such as watching TV alone and socializing with family and friends; (ii) reduced both factual news knowledge and political polarization; (iii) increased subjective well-being; and (iv) caused a large persistent reduction in post-experiment Facebook use. Deactivation reduced post-experiment valuations of Facebook, suggesting that traditional metrics may overstate consumer surplus.

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Suggested Citation

Allcott, Hunt and Braghieri, Luca and Eichmeyer, Sarah and Gentzkow, Matthew, The Welfare Effects of Social Media (January 2019). NBER Working Paper No. w25514. Available at SSRN: https://ssrn.com/abstract=3328381

Hunt Allcott (Contact Author)

New York University (NYU) ( email )

Bobst Library, E-resource Acquisitions
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New York, NY 10003-711
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Luca Braghieri

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Sarah Eichmeyer

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Matthew Gentzkow

Stanford University ( email )

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