Research

• Measuring the value of free digital services

The goal of this study is to estimate and examine the value derived by households from the utilization of free digital services. For this exercise, we estimate value from the final consumption of three forms of free digital services: videoconferencing, personal email, and online news. As our measurement strategy, we employ the prices of "premium" or paid internet services as a proxy for the value of their free counterparts. We also use hedonic regression in order to extract the value of the 'free component' of these products and untangle them from the value of the premium-exclusive components. Our final estimates show that in 2020, the aggregate gross value derived by households from the consumption of the three digital services was between £7.0 billion and £25.4 billion, which is 0.57 to 2 percent of household final consumption expenditures (HFCE). We also observe that the value derived by households from consuming these products is growing much faster than HFCE. Our estimates show that in 2020, the initial year of the COVID pandemic, real household final consumption decline would have been 0.07 to 0.13  percentage points slower had the value of the three digital services been incorporated in the estimates.

[Discussion Paper]

[Conference Proceedings (World KLEMS)]

• Measuring the Value of Digital Piracy

The goal of this study is to measure the value derived by households from digital piracy. Our measurement strategy employs the price of paid digital services and services (e.g. Spotify, Netflix) as a proxy for the shadow price of their illegally acquired counterparts. This is a common method for the valuation of non-market activity and non-monetary transactions for national accounting purposes. To estimate the number of individuals engaged in digital piracy, we used information from the United Kingdom's Intellectual Property Office annual Piracy Tracker, which provides an estimate of the proportion of the UK population that engages in digital piracy. We find that, on average, the gross value from the piracy of music, video, live sports, software, computer games, and ebooks was between £3.6 billion and £7.5 billion in 2021. We also find that while the value from the final consumption of communication services has been consistently rising in the past five years, the inflation-adjusted gross value from the digital piracy of media has been falling. Our data shows that the growth in the value of final consumption from communication services would have been slower by 0.2 percentage points in 2021 had the value from the consumption of pirated content been accounted for in the estimates.

[Duscission Paper]

• Measuring the depreciation of intangible assets

This study introduces a novel methodology to estimate the depreciation of intangible assets, specifically focusing on software and creative originals, using data from Google Search Volume (GSV), commonly referred to as Google Trends. Depreciation, in this context, is understood as a manifestation of obsolescence. As intangible assets become obsolete, their capacity to generate future output or revenue diminishes. GSV provides a practical means to gauge the popularity of products generated by these assets, as a surge in internet searches indicates their relevance. The decline in search activity over time is directly associated with the concept of obsolescence, aligning with economic depreciation principles. In our analysis, we employ Poisson Pseudo-Maximum-Likelihood (PPML) and negative binomial regressions to estimate the rate of decline of GSV results for a sample of software and movie titles. Our findings reveal a depreciation rate for software originals ranging from 13.4 to 19.4 percent. This is lower than the estimates employed by statistical agencies, which is around 20 to 25 percent. Estimates for movies are comparable to estimates by statistical agencies, notably the US and Germany. We also find that if we apply the depreciation rates we generated from this methodology to the estimation of capital stock, TFP growth for the Information and Communication industry would be higher particularly from 1996 to early 2008, and again from 2011 to the end of 2016.

[Conference Proceedings (IARIW)]

[Discussion Paper]

Read more of my research through the following sites:

• Google Scholar

• Researchgate