Can Anybody Possibly Measure the Real Price of Information?

The incalculable advantages of digital innovation on the cost and quality of life

Do economic statistics on the cost of living undervalue the benefits of information technology? Experts and lay people have been arguing the question for years, most recently in a column by Eduardo Porter in the New York Times. His own newspaper, he argues, has been fundamentally enhanced by electronic research, online graphics, and other features, all instantly available, while its global reach has extended to 44 million readers.

If Mr. Porter had published a similar column in June 2002, when the Times share price had increased to $51.50 from about $10 in 1995, the year Netscape and Internet Explorer were introduced and Bill Gates published The Road Ahead, he would have been more persuasive. Today the price is now about $9. While recent Times buyouts have affected more managers and editors than reporters, and its investigative series continue to be outstanding, there are also some writers on the science, technology, and business sides whose contributions I miss -- not to mention the often excellent New Jersey (and Connecticut) sections of the Sunday paper. And the Times' cuts have been delicate compared to those at other papers, including the NYT Co.-owned Boston Globe, which brought an angry letter from the late Sen. Ted Kennedy in 2006 (just search for "shrinking news hole" on the Web). So perhaps new technology is having a net negative effect on the real price of professionally prepared information.

Then there's savings in time, mentioned by Mr. Porter and some of the economists whose work he quotes. But what of the additional time burdens of debugging software conflicts, synchronizing multiple devices (desktops, tablets, smartphones), and combing through search results for the best quality content? And while we're on the topic of time and accessibility, consider the experience of my friend the user interface designer Aaron Marcus, a longtime Mac admirer, with Apple products. Of course others may have been consistently delighted, but my point is that economists can't simply assume time savings any more.

Finally there's the price of information abundance, and it's been going up, not down. After the end of most unlimited data plans, many families now face huge bills from combined cable television, broadband, and especially smartphones. As the Wall Street Journal reported last year:

[A]s more people paid up for $200 smartphones and bills that run around $100 a month, the average household's annual spending on telephone services rose to $1,226 in 2011 from $1,110 in 2007, when Apple Inc.'s iPhone first appeared.

Families with more than one smartphone are already paying much more than the average--sometimes more than $4,000 a year--easily eclipsing what they pay for cable TV and home Internet.

I'm sure that some people will feel immeasurably enriched by apps and new information services in the last few years, making all these costs a bargain, while others will identify with what Mr. Porter's colleague Charles Blow calls "the morose middle class."

For now, at least, I won't take sides in that argument. I suspect it's a dispute of values masquerading as measurable variables. Is time watching videos of cute kittens and beat-boxing cockatoos a gain of virtual or loss of potential income, or both?  Perhaps cost-of-living statisticians should avoid such philosophical issues and consider sticking to commodities like gasoline, milk, and cheeseburgers.