10 ms·

The Welfare Effects of Social Media [pdf]

66 points by endofcapital 8y ago

chrispeel 8y ago
"We use participants’ pre-experiment and post-experiment Facebook valuations to quantify the extent to which factors such as projection bias might cause people to overvalue Facebook, finding that the magnitude of any such biases is likely minor relative to the large consumer surplus that Facebook generates." What is "consumer surplus"? By this do the authors mean the total benefit to FB users?
- HillaryBriss 8y ago
  It's an economist's term. I do wonder about the benefit to FB users. I just got this from Wikipedia: Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they do pay. If a consumer would be willing to pay more than the current asking price, then they are getting more benefit from the purchased product than they initially paid. https://en.wikipedia.org/wiki/Economic_surplus#Consumer_surplus https://en.wikipedia.org/wiki/Economic_surplus#Consumer_surp... What would consumers actually pay out of pocket for an ad-free FB? Alternatively: imagine there was a job that required you to type in your sensitive personal information and then a business took that information, sold (or accidentally gave) it to other businesses, used it to target ads at you, and leaked it to hackers. Imagine also that this business exposed your sensitive personal information to other people who might use it to your economic and social benefit and/or to your detriment (though you cannot predict how or to what extent). How much should you be paid to do that job? Can it be argued that FB actually offers consumers a deficit instead of a surplus?
- nickles 8y ago
  > What is "consumer surplus"? By this do the authors mean the total benefit to FB users? It's a concept from welfare economics (economic benefit at an aggregate level). Consumer surplus is the excess benefit a consumer receives from purchasing a good (willingness to pay - price paid). For example, if you're willing to pay $100 annually to use Facebook, and you actually pay $0, then the consumer surplus would be $100.
- savanaly 8y ago
  Economists assume that there exists some value V that if you offered $V to someone to quit facebook, they would be indifferent to the offer. That is, if we offered V + $0.01 they would certainly take the offer and consider themselves a penny better off, and if we offered V - $0.01 they would refuse the offer. There's also some cost to facebook. In the first world it's probably just whatever you perceive to be the impact on you from reduced privacy. In the third world, well, I seem to remember Facebook actually provides internet to people solely for the purpose of using Facebook so in such a case the cost might be tangible. In any case, call it C. Then consumer surplus is V - C, summed over all consumers. https://www.youtube.com/watch?v=_6kwhF6hoqQ https://www.youtube.com/watch?v=_6kwhF6hoqQ
andrew_ 8y ago
My own anecdotal experience echos a similar result to the findings. Though I didn't remove Facebook altogether, I did unfollow and clear my timeline permanently, removed all media, and use it exclusively for receiving Event invitations and notifications. Still, I do not miss a single thing about the rest of that network. Sadly I admit that my Twitter use has gone up as a result. It seems I've got some more work to do to kick the social media habit.
whocares123 8y ago
Social media in general is a tumor on society and a net-negative. I would be ashamed to say i work at a social media company. This latest iteration dies and i hope nothing spawns from its ashes
- o10449366 8y ago
  Care to elaborate on why you think social media is a net-negative and a "tumor" on society?
- sctb 8y ago
  These sorts of comments aren't substantive enough to warrant a throwaway—please just skip them.
elpakal 8y ago
Anecdotally, the hardest part for me when I deleted FB entirely was the first two weeks. The amount of times I was itching to check an update, see what was liked or browse some new posts was shocking to me. Get through the first two weeks and you realize how much of an addiction this can be. Replace _deleted_FB_ above with any other addiction and similarities appear.
o10449366 8y ago
One takeaway from the study that's often ignored on Hacker News, likely because most users here don't use Facebook or have a negative view towards the company, is that the majority of FB users place a real value on its service. Instagram and FB and Whatsapp may be useless to you, but that doesn't mean they don't contribute very real (and even positive) utility to the majority of their users. "Our participants’ answers in free response questions and follow-up interviews make clear the diverse ways in which Facebook can improve people’s lives, whether as a source of entertainment, a means to organize a charity or an activist group, or a vital social lifeline for those who are otherwise isolated. Any discussion of social media’s downsides should not obscure the basic fact that it fulfills deep and widespread needs" This is a point often left out of discussions on this website, unfortunately.
- nugget 8y ago
  What are the best replacements (products, services, or just best practices) for Facebook's core utility of sharing photos and updates, and generally staying in touch with family and friends in your network? I agree with you that there's real value there, but for me it became overshadowed by the deluge of unwanted features and content.
  - webmobdev 8y ago
    The old fashioned way - remember their birthdays and anniversaries, call and talk to them regularly (once a month or two is fine), meet them if they come to town or you visit their city, make an effort to be with them during important events (death, birth, marriage, new job etc.) as much as possible. It doesn't matter if they are too busy sometimes - just do this diligently.
    - kinkrtyavimoodh 8y ago
      Except that even before FB no one remembered birthdays and anniversaries of more than maybe their 10-20 immediate contacts/relations. The rest were diligently written down in a diary.
deleted 8y ago
[deleted]
erickhill 8y ago
I deleted my personal account and created an anonymous one purely for FB Groups. The first 3 days took a lot of getting used to - like quitting smoking. I realized I had a hand-fixation of pulling out my phone, hitting the home button and going to the app. With no social connections, it became only for reading new posts in the Groups I'm attached to now (retro computing) which are not nearly as frequent nor as acidic. It's sort of the new version of Forums, really. And since they are moderated, the conversation is very interesting/helpful and on point. I'll never hook up the personal social graph again. And yeah, after about 2-3 weeks of being unplugged I wasn't twitchy about it anymore. I thought I'd have a giant gaping hole after using it for 10 years. I was wrong. Life is better without it.
- mcculley 8y ago
  I went through and unfollowed every person (except for a few close family members) and disabled notifications on almost all pages. Now when I accept a new friend request, I immediately unfollow that person. I have almost no notifications and very little reason to browse Facebook, but I can still use it to contact people and respond to event invitations. I find this to be a good compromise.
- AlexandrB 8y ago
  I feel lucky that I was over a year into university before Facebook arrived. I still remember socializing without Facebook or smartphones - that it's not only possible, but in some ways more intimate and fulfilling. It must be really tough for younger millennials to grow up with Facebook/Instagram/Whatsapp and be confronted with quitting.

66 points by endofcapital 8y ago

"We use participants’ pre-experiment and post-experiment Facebook valuations to quantify the extent to which factors such as projection bias might cause people to overvalue Facebook, finding that the magnitude of any such biases is likely minor relative to the large consumer surplus that Facebook generates." What is "consumer surplus"? By this do the authors mean the total benefit to FB users?

HillaryBriss 8y ago
It's an economist's term. I do wonder about the benefit to FB users. I just got this from Wikipedia: Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they do pay. If a consumer would be willing to pay more than the current asking price, then they are getting more benefit from the purchased product than they initially paid. https://en.wikipedia.org/wiki/Economic_surplus#Consumer_surplus https://en.wikipedia.org/wiki/Economic_surplus#Consumer_surp... What would consumers actually pay out of pocket for an ad-free FB? Alternatively: imagine there was a job that required you to type in your sensitive personal information and then a business took that information, sold (or accidentally gave) it to other businesses, used it to target ads at you, and leaked it to hackers. Imagine also that this business exposed your sensitive personal information to other people who might use it to your economic and social benefit and/or to your detriment (though you cannot predict how or to what extent). How much should you be paid to do that job? Can it be argued that FB actually offers consumers a deficit instead of a surplus?
nickles 8y ago
> What is "consumer surplus"? By this do the authors mean the total benefit to FB users? It's a concept from welfare economics (economic benefit at an aggregate level). Consumer surplus is the excess benefit a consumer receives from purchasing a good (willingness to pay - price paid). For example, if you're willing to pay $100 annually to use Facebook, and you actually pay $0, then the consumer surplus would be $100.
savanaly 8y ago
Economists assume that there exists some value V that if you offered $V to someone to quit facebook, they would be indifferent to the offer. That is, if we offered V + $0.01 they would certainly take the offer and consider themselves a penny better off, and if we offered V - $0.01 they would refuse the offer. There's also some cost to facebook. In the first world it's probably just whatever you perceive to be the impact on you from reduced privacy. In the third world, well, I seem to remember Facebook actually provides internet to people solely for the purpose of using Facebook so in such a case the cost might be tangible. In any case, call it C. Then consumer surplus is V - C, summed over all consumers. https://www.youtube.com/watch?v=_6kwhF6hoqQ https://www.youtube.com/watch?v=_6kwhF6hoqQ

andrew_ 8y ago

My own anecdotal experience echos a similar result to the findings. Though I didn't remove Facebook altogether, I did unfollow and clear my timeline permanently, removed all media, and use it exclusively for receiving Event invitations and notifications. Still, I do not miss a single thing about the rest of that network. Sadly I admit that my Twitter use has gone up as a result. It seems I've got some more work to do to kick the social media habit.

whocares123 8y ago

Social media in general is a tumor on society and a net-negative. I would be ashamed to say i work at a social media company. This latest iteration dies and i hope nothing spawns from its ashes

o10449366 8y ago
Care to elaborate on why you think social media is a net-negative and a "tumor" on society?
sctb 8y ago
These sorts of comments aren't substantive enough to warrant a throwaway—please just skip them.

elpakal 8y ago

Anecdotally, the hardest part for me when I deleted FB entirely was the first two weeks. The amount of times I was itching to check an update, see what was liked or browse some new posts was shocking to me. Get through the first two weeks and you realize how much of an addiction this can be. Replace _deleted_FB_ above with any other addiction and similarities appear.

o10449366 8y ago

One takeaway from the study that's often ignored on Hacker News, likely because most users here don't use Facebook or have a negative view towards the company, is that the majority of FB users place a real value on its service. Instagram and FB and Whatsapp may be useless to you, but that doesn't mean they don't contribute very real (and even positive) utility to the majority of their users. "Our participants’ answers in free response questions and follow-up interviews make clear the diverse ways in which Facebook can improve people’s lives, whether as a source of entertainment, a means to organize a charity or an activist group, or a vital social lifeline for those who are otherwise isolated. Any discussion of social media’s downsides should not obscure the basic fact that it fulfills deep and widespread needs" This is a point often left out of discussions on this website, unfortunately.

nugget 8y ago
What are the best replacements (products, services, or just best practices) for Facebook's core utility of sharing photos and updates, and generally staying in touch with family and friends in your network? I agree with you that there's real value there, but for me it became overshadowed by the deluge of unwanted features and content.
- webmobdev 8y ago
  The old fashioned way - remember their birthdays and anniversaries, call and talk to them regularly (once a month or two is fine), meet them if they come to town or you visit their city, make an effort to be with them during important events (death, birth, marriage, new job etc.) as much as possible. It doesn't matter if they are too busy sometimes - just do this diligently.
  - kinkrtyavimoodh 8y ago
    Except that even before FB no one remembered birthdays and anniversaries of more than maybe their 10-20 immediate contacts/relations. The rest were diligently written down in a diary.

deleted 8y ago

[deleted]

erickhill 8y ago

I deleted my personal account and created an anonymous one purely for FB Groups. The first 3 days took a lot of getting used to - like quitting smoking. I realized I had a hand-fixation of pulling out my phone, hitting the home button and going to the app. With no social connections, it became only for reading new posts in the Groups I'm attached to now (retro computing) which are not nearly as frequent nor as acidic. It's sort of the new version of Forums, really. And since they are moderated, the conversation is very interesting/helpful and on point. I'll never hook up the personal social graph again. And yeah, after about 2-3 weeks of being unplugged I wasn't twitchy about it anymore. I thought I'd have a giant gaping hole after using it for 10 years. I was wrong. Life is better without it.

mcculley 8y ago
I went through and unfollowed every person (except for a few close family members) and disabled notifications on almost all pages. Now when I accept a new friend request, I immediately unfollow that person. I have almost no notifications and very little reason to browse Facebook, but I can still use it to contact people and respond to event invitations. I find this to be a good compromise.
AlexandrB 8y ago
I feel lucky that I was over a year into university before Facebook arrived. I still remember socializing without Facebook or smartphones - that it's not only possible, but in some ways more intimate and fulfilling. It must be really tough for younger millennials to grow up with Facebook/Instagram/Whatsapp and be confronted with quitting.