(CN) – In a study released Wednesday, a team of economists and a social media researcher found most people would demand between $1,100 and $2,000 in exchange for giving up Facebook for a year.
Facebook, with its more than 2.2 billion global users, is one of many social media sites with free access for users. And there’s little doubt Facebook and the other social media companies it owns, including Instagram and WhatsApp, are radically transforming relationships and reshaping the way people interact with each other.
But researchers wanted to quantify Facebook’s value to users and their communities beyond the company’s market value or its contribution to gross domestic product.
“We know people must derive tremendous value from Facebook or they wouldn’t spend millions of hours on the site every day,” Kenyon College’s Jay Corrigan, a study co-author, said in a statement. “The challenge is how to put a dollar value on a service people don’t pay for.”
The team used auctions to determine what Facebook is worth to users. In one auction, involving 122 Kenyon College students, the average bid for deactivating Facebook for one day was $4.17. In other auctions at the central Ohio college, students demanded an average of $13.89 to walk away from Facebook for three days and $37 to go without Facebook for a week.
Those figures translate to between $1,511 and $1,908 for Kenyon College students to deactivate their Facebook accounts for a year.
The value of Facebook changed slightly in a separate auction involving 133 students at a larger campus, Michigan State University, and 138 other adults from the surrounding town. Michigan State students wanted an average of $2,076 to unplug from Facebook for a year, while the adults bid $1,139 on average.
“Auction participants faced real financial consequences, so they had an incentive to seriously consider what compensation they would want to close their accounts for a set period of time and to bid truthfully,” said Tufts University researcher and study co-author Sean Cash.
Cash also noted some participants refused to bid at all, suggesting that deactivating Facebook for a year was not even a possibility for them.
Researchers also engaged 931 adults in an online nationwide auction set up through Amazon’s Mechanical Turk open marketplace. There, the average bid to deactivate Facebook for one year came to $1,921.
Auction winners received their money after they proved their Facebook accounts were deactivated for the time period specified in the auction.
Facebook remains the top social networking site in the world and the third most visited site on the Internet, after Google and YouTube. But the company’s market value doesn’t match up with the value that it has for users, researchers said.
A market valuation of approximately $420 billion represents a per-user value of about $190. That’s less than a quarter of the annual average value Facebook users placed on account access through the auctions.
“While the measurable impact Facebook and other free online services have on the economy may be small, our results show that the benefits these services provide for their users are large,” wrote the authors.
The study, published in the science and technology magazine PLOS One, was also co-authored by Saleem Alhabash at Michigan State University and Matthew Rousu of Susquehanna University.
The authors noted that the samples, somewhat skewed toward students, are not necessarily representative of all Facebook users, but that there was consistency in price valuation by users across the samples and timeframes.