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The economic effects of Facebook

Published online by Cambridge University Press:  14 March 2025

Roberto Mosquera ,
Mofioluwasademi Odunowo ,
Trent McNamara ,
Xiongfei Guo  and
Ragan Petrie Open the ORCID record for Ragan Petrie [Opens in a new window]
Roberto Mosquera*
Affiliation:
Department of Economics, Universidad de las Americas, De los Granados E12-41 y Colimes esquina Quito, Ecuador
Mofioluwasademi Odunowo*
Affiliation:
Department of Economics, Texas A&M University, 4228 TAMU, 77843 College Station, TX, USA
Trent McNamara*
Affiliation:
Department of Economics, Texas A&M University, 4228 TAMU, 77843 College Station, TX, USA
Xiongfei Guo*
Affiliation:
Department of Economics, Texas A&M University, 4228 TAMU, 77843 College Station, TX, USA
Ragan Petrie*
Affiliation:
Department of Economics, Texas A&M University, 4228 TAMU, 77843 College Station, TX, USA
*
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
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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 1765 individuals to document the value of Facebook to users and its causal effect on news, 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. One week of Facebook is worth $67. Those who are off Facebook for one week reduce news consumption, are less likely to recognize politically-skewed news stories, report being less depressed and engage in healthier activities. These results are strongest for men. Our results further suggest that, after the restriction, Facebook’s value increases, consistent with information loss or that using Facebook may be addictive.

Keywords

Social mediaField experimentValue of FacebookNews awarenessWell-beingGender

JEL classification

I31: General Welfare, Well-Being C93: Field Experiments D91: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ D83: Search • Learning • Information and Knowledge • Communication • Belief • Unawareness
Type
Original Paper
Information
Experimental Economics , Volume 23 , Issue 2 , June 2020 , pp. 575 - 602
Copyright
Copyright © 2019 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-019-09625-y) contains supplementary material, which is available to authorized users.

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