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Economists Calculate the True Value of Facebook To Its Users in New Study (arstechnica.com)
A series of auctions revealed that Facebook users value the company's service so highly that it would take on average more than $1,000 to convince them to deactivate their accounts for a year, according to a recent paper published in PLOS One. From a report: This doesn't mean much for the company's stock market valuation, but it's a good indicator that people find value in Facebook regardless of the many concerns raised recently. The paper started out as two separate studies. Jay Corrigan, an economist at Kenyon College, and his collaborator, Matt Rousu of Susquehanna University, were interested in a session on this topic at an upcoming conference. They discovered that Sean Cash (Tufts University) and Saleem Alhabash (Michigan State University) were doing something very similar.
Since the design of both studies was so complementary, they decided to combine their data and results into a single paper. Cash and Saleem had a larger sample for their part of the study and looked at a longer time period of one year, while Corrigan and Rosein focused on shorter time frames, asking subjects to quit Facebook for one day, three days, or seven days. The studies nonetheless had similar results.
Since the design of both studies was so complementary, they decided to combine their data and results into a single paper. Cash and Saleem had a larger sample for their part of the study and looked at a longer time period of one year, while Corrigan and Rosein focused on shorter time frames, asking subjects to quit Facebook for one day, three days, or seven days. The studies nonetheless had similar results.
Seems there could be a poll in this...
Me, it'd take $1000 to convince me to open an account - then a lot more than that to actually use it.
"A door is what a dog is perpetually on the wrong side of" - Ogden Nash
Give me 10bucks and I will create an account on this shit platform and erase it forever 5minutes later.
YOU MUST BE COMPLETELY DUMB TO USE FACEBOOK !!
JC DENTON: I don't see anything amusing about spying on people.
MORPHEUS : Human beings feel pleasure when they are watched. I have recorded their smiles as I tell them who they are.
JC DENTON: Some people just don't understand the dangers of indiscriminate surveillance.
MORPHEUS: The need to be observed and understood was once satisfied by God. Now we can implement the same functionality with data-mining algorithms.
JC DENTON: Electronic surveillance hardly inspired reverence. Perhaps fear and obedience, but not reverence.
MORPHEUS: God and the gods were apparitions of observation, judgment, and punishment. Other sentiments toward them were secondary.
JC DENTON: No one will ever worship a software entity peering at them through a camera.
MORPHEUS: The human organism always worships. First it was the gods, then it was fame (the observation and judgment of others), next it will be the self-aware systems you have built to realize truly omnipresent observation and judgment.
JC DENTON: You underestimate humankind's love of freedom.
MORPHEUS: The individual desires judgment. Without that desire, the cohesion of groups is impossible, and so is civilization. The human being created civilization not because of a willingness but because of a need to be assimilated into higher orders of structure and meaning. God was a dream of good government. You will soon have your God, and you will make it with your own hands. I was made to assist you. I am a prototype of a much larger system.
Not less.
I'd be happy with $100 to stay off it for a year.
Heck, that's good enough to stay off it forever.
The average Human, which is honestly not that far away from the average FB account holder, does not even make anywhere close to $1000 a year.
With all the scams FB et al. have going on in stone age societies I would not expect the average yearly salary of personal FB accounts to be much over $1000.
Troll is not a replacement for I disagree.
The problem with Facebook isn't its value proposition. Clearly people (though perhaps not many of us) find value in using it. The problem with Facebook is the lack of informed consent.
I have no problem with people pissing away their privacy for some additional, marginal utility. That's their prerogative. But that person has a right to understand what it means when they do so: to understand what they're giving up in exchange for what they're receiving. That's a foundational principle on which transactions are built in functioning societies.
When I pay for goods in a store, the terms of the transaction make it clear what each party is giving up: I pay $X and in exchange I receive Y item. One or both of us may not properly value what it is that we're giving up (e.g. an eBay seller listing an item far under what it's worth), but there's never a question about what's being exchanged. But when comparable transactions occur between Facebook and its users, most users aren't even aware that those transactions have occurred, let alone what they've lost in the process. That's the problem.
If people want to throw away their privacy, that's their call, but force those capitalizing on it to make it clear what that means.
Your mom went to Kenyon.
That is actually a humorous response. Kudos.
"If you want to improve, be content to be thought foolish and stupid." - Epictetus
I'd do that for free!
This poll is not representative of the vast majority of FB users. It used US college students as subjects
- anecdotally FB is a tool of old folks
- college students don't have a care. Unless they're worried about staying in touch with mom
The theme of the report is interesting however flawed the sample.
Value is not determined by how much people would have to be paid to give something up, but rather by how much people would spend to have it. Want to prove that they're not the same? Ask someone how much they would be reasonably able to spend on food for a year. Then ask how much you'd have to pay them to go without food for a year. :-)
And with Facebook, the disparity is even greater because it isn't something that you have to have to survive, and more importantly, because there are other alternatives that existed prior to Facebook, and there will be other alternatives that will come into existence after Facebook eventually falls apart. This makes giving up Facebook more like giving up eating out at restaurants for a year. It's a hassle, so they'll make you pay a lot for the hassle, and that cost is likely to be way more than the actual cost difference between eating out and cooking food for themselves. But if you made the cost of restaurants higher based on that, people would eat out less often.
To further compound the problem, the only thing keeping Facebook going is network effects, i.e. people use Facebook because everybody they talk to uses Facebook. One person leaving Facebook while everybody else stays is painful. If everybody flees from Facebook to something else at the same time, that's much less painful.
What this means is that if Facebook suddenly decided to charge a subscription fee — particularly the $80 per month subscription fee suggested by this analysis ($1,000 annually), Facebook would implode. I doubt they would be left with even a single subscriber at that rate by the end of the first year. I doubt they would do well at even $10 per month.
Now if Facebook offered an optional $5 per month subscription that gets you ad-free, no-tracking access, some people might do that. But even that would only work if it were optional, because the value of Facebook comes from nearly everyone you communicate with being willing to pay whatever the cost is to access it, and if that cost is too high, the value plummets.
Check out my sci-fi/humor trilogy at PatriotsBooks.
Facebook users value the company's service so highly ...
The most important point is that we should never believe anything that comes from a survey. Creating corporate policy by asking people hypothetical questions is a disastrous way to run a business. The only reliable course is to see what they actually do. Not what they say they might do.
Secondly, there is a massive difference between the inducement that people say they need to do something and what they would actually pay for the opposite. So they say it would take $1000 to get them to close their account. I doubt if even 1% of them worldwide would be willing to pay $1 to open a new account. Or to access "premium" features.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
I disagree with this type of study. I have an account that I barely use (less than once per month), but if someone ask me to deactivate it for a year, I will get greedy. Of course it's worth at least $1000.
This is dumb, they've completely reversed what they should have been doing. People are motivated by profit, so this is just a 'how high a figure can I get you to give me' study. I don't even use Facebook, but I too would have driven the price up to thousands of dollars. Geeze.
What they should have done is the opposite, ask them how much are they willing to spend in order to keep it. Then you'd find the real worth. Some people would spend the thousands, some hundreds, and others like myself would pay $0. Hell, I'd spend money just to wipe Facebook off the earth, it truly is a blight on society.
Folks, the internet was made to run lots of servers, not just a few Monopoly Systems like FB and Google. No need to suffer their arbitrary censorship and SJW craze. These days we have all the tools to run servers and clients not under the control of billionaries and their strange agendas:
http://altwissenschaft.ddnss.de/PrivatServer.html
http://altwissenschaft.ddnss.de/AlternativListe.html
http://altwissenschaft.ddnss.de/AlternativeOpenSource.html
Now, do something to liberate yourself and run your own server:
http://altwissenschaft.ddnss.de/PrivatServer.html
Things like Facebook have a lot of inertia. If you use it a lot, then certainly over a year letting go of it would lead to many small inconveniences adding up.
Even if I had an account and logged in once in a blue moon I would say no to say $100/year, because over a year, it's basically a rounding error. $8/month is well below what I spend on coffee and random nonsense and not worth the exchange for anything that even might come handy.
$1000/year would seem to be the starting point where it starts feeling like money -- if you're living paycheck to paycheck, then $83/month is probably a pretty big deal.
I think that's mostly unrelated to Facebook, though. My logic would go the same if you asked me to say, commit to not using a dremel tool (which I very rarely use). It's less about the value of Facebook, and more about the amount that starts feeling like enough money to justify any sort of year-long commitment.
Of course the price would go up a lot for something I actually valued. I would put a $1000/year threshold as the absolute minimum to consider something of this kind.
They think it's worth a grand? Either that or 3 cents and a viable alternative. What people value is the ability to keep in contact with friends and relatives. People value social networking, not the sleazy company that hosts it.
I do not block ads. I do block third party scripts.
You made some good points.
I would point out that while it's true that if Facebook (tm) suddenly started charging $1,000 / year, almost everyone would stop using Facebook.com - but only as they switched to a different brand of the same thing.
It would be inaccurate to judge the value of a gallon of milk this way:
How much would you pay to get Borden brand milk, if you could get Daisy brand milk for free?
Assuming a sudden $1,000 / year charge, and everyone leaving all at once, the benefits of the network effect would move to another similar service that's offered with $0 subscription, free of monetary charge. That doesn't mean it's worthless, it just means people can substitute an equally-valuable service without paying money (but still paying via ads, privacy, etc.)
The study seems to provide some indication of how Facebook users on a small midwestern liberal arts college campus mean age of 20 value Facebook at the time of the study. Its basically junk science.
It's true that Facebook's demographic has more older people today than it did ten years ago. However, was originally an online "yearbook" for Harvard, nothing but college students. Currently about 45% of Facebook users are 18-34.
It's not their measure of its value but a metric for their ignorance and conduciveness to their own slavery.
Calculate that and I'll be impressed
I gave it up for free! It didn't take me any money to convince me to close my account. Fuck Facebook and fuck Mark Zuckerberg!
you want to talk about indoctrinating, brainwashing and tormenting schools?
have you met your lord and savior, regent university (founded and currently run by pat robertson) or its close cousin, liberty university (founded by jerry falwell and currently run by his kid)?
Logged out in May. Haven't read anything there since then. Can I please have $600 now and I'll take the rest in May?
You are not entitled to your opinion. You are entitled to your informed opinion. -- Harlan Ellison
The best value going to me are the private groups. I belong to several hobby related groups and they're the new forum of the internet it seems, even if the format is terrible for forum-style posting. I can share information and questions with people all over the world and get answers. We show off projects. And they're all on one platform.
I've seen some arguments about going back to personal websites and an extension of that would be the forums that are still going but not nearly as diverse as the FB groups it seems.
The personal information they collect? If they want to know I'm finishing collecting the Chessex Festive dice line or that I'm asking about where to get cooling fans for my 3D printer they're welcome to that information.
or just something like retroshare...
Immeasurable.
Isn't that about what they're implying here?
The real problem: People don't really understand what it is that Facebook is doing to them. Otherwise they'd likely care more.
I'd spend $20 a year to not have Facebook around.
That would be how much people would pay if Facebook were to freeze all accounts until they pay a one time or other fee. My guess is the number would be much lower.
In other news heroin addicts would rather risk their health and even life to get another shot.
Why is this modded -1?
Someone needs to lose mod privileges.
ive not made any money form it so its value is zero
$1000 is just self-congratulatory nonsense. Looks like 2019 will be the year of Facebook's demise.
Quit Facebook. A week ago, I said, I was done. I would rather see my friends in person. I'll never log in again.
Most likely, addicts value their hit of cocaine at $1000 as well. Weird research, to ask dopamine addicts how much they are willing to pay to keep feeding their habit.
Very much agree!
But the trend seems to point in the other direction.
I think that the success of Facebook has two major factors. One is that a lot of people want confirmation and has a FOMO, and FB gives them a feed for that. However, I don't think that this is the major success factor.
The second and more important factor, and the reason why FB is for "old folks" while the kids hang out on other, more confirmation-focused media, is that it is a super-accessible platform for information sharing in the daily free-time life. People, interest groups, organizations, the local Karate club, ... It is very very easy to share and distribute information to interested parties and to manage those parties. It is also very very easy to consume the information. Just open a browser on any device, or an app if you are of that persuasion. In one place, with one login, one account to remember, one user interface, you have access to a large portion of you connection with these parties.
Everything on Facebook has been done in other forms before - forums used to be prolific and a lot still exist, photo and video sharing, market places, RSS feeds, ... dammit, regular web pages for that matter. But just like Slack as another example, it packages the services into a very accessible package and leaves a lot of power users wondering why people don't just use the existing proven technology.
If we want something that can provide the value (to the user) that FB provides, it must be packaged in an equally accessible format.
If we don't want to pay with our souls, we have to find another way to pay - and make people want (and be able) to pay that price. Or find sponsors.
value the company's service so highly that it would take on average more than $1,000 to convince them to deactivate their accounts for a year
I am not an economist (by any means), but perhaps that's how low people value $1000 or amounts under it?
Free, as in your money being freed from the confines of your account.
"A series of auctions revealed that Facebook users value the company's service so highly that it would take on average more than $1,000 to convince them to deactivate their accounts for a year"
Give them access to another service with all the people they connect to via FB, and they'll dump FB in a hot minute.
Its hard for me to imagine how Facebook could inform people any more robustly than they already do.
They have gone to the extreme lengths that they put a giant ad on your app, that you MUST dismiss, at least once a month asking people to go review their privacy settings.
Of course, everyone just dismisses it.
Is it possible that the majority of people simply do not care as much as Slashdot thinks they should?
The description in the summary implies that people were offered money to give up FB in an attempt to determine how much FB is worth? Did I read that correctly?
For their next study, will they offer cash to meth addicts to see how much the meth industry is worth? It is just that I don't think their take-away from this study is what they summary implies.
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba