Economists Calculate the True Value of Facebook To Its Users in New Study

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.

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