I have long made the point that economic value is not GDP – not even in theory. You don’t have to step outside of economics to see this. Its right there in Econ 101.
Two markets. Same contribution to GDP. Very different Consumer Surpluses and hence very different economic values.
What non-subsidized common products and services do you think have the highest average consumer surplus? Cell phones? Shampoo? Antibiotics? Just wondering.
Tyler responds with
Obviously it depends what margin you are at; for many people antibiotics or pharmaceuticals mean the difference for life or death but right now they do not for me. And surely we cannot answer with “all food” or “all water.”
So I am not sure what he means by the margin here. I thought the question was asking if we add up the total consumer surplus and then divide by the number of consumers which market has the biggest number. This is inherently an average based stat. But, anyway.
I do think potable water would rank pretty high though in general it is subsidized. If the we think about the alternative of getting your water through household production then I am pretty sure people would be willing to trade away much of their endowment – the wealth, talent and physical labor power they were born with – in order to get market supplied water.
Food probably not as much, actually.
My “non-necessity” answer though is pretty conventional: internet content. Not access. Content. Most people pay nothing for it. However, if there was a scheme that eliminated transactions costs but nonetheless charged for everything you watch, listened to or read online, I am guessing it would fetch a hefty fraction of most families income.