GDP-B: Accounting for the Value of New and Free Goods

Brynjolfsson and colleagues tackle the central measurement problem of the digital economy: how do you account for the welfare value of free products like search engines, social networks, or smartphone apps that never appear in GDP statistics? Their GDP-B framework uses incentive-compatible choice experiments to estimate what people would pay to keep these products, revealing billions in unmeasured value. For product directors this is essential infrastructure — a rigorous way to think about value creation beyond revenue metrics. The paper provides both theoretical foundation and practical methodology for measuring impact in platform economies where traditional accounting breaks down. The smartphone camera example alone demonstrates why product teams need better frameworks for understanding the economic value they create beyond what shows up in financial statements.