Comments on: Why internet/GDP ratios make no sense

By: SteveHamlin

SteveHamlin — Fri, 20 Apr 2012 16:23:07 +0000

Felix writes: “you’d never dream of measuring different countries’ electricity-to-GDP ratios.”

Really? And certainly that is wrong with respect to changes in an individual country’s watt/GDP ratio over time.

Elctricity-to-GDP seems to be a widely looked-at metric, particularly with respect to cross-checking Chinese GDP numbers: http://www.google.com/search?hl=en&q=chi na+electrical+consumption+GDP

By: realist50

realist50 — Fri, 20 Apr 2012 15:33:40 +0000

Sounds like all sorts of methodology problems here, including another one not mentioned – the numerator and denominator are apples and oranges. GDP is a concept of value-added, while a company’s revenue is not. Using a concrete example, Amazon’s revenue is far greater than its contribution to GDP, as much of the GDP contribution comes from the production and transportation of goods prior to Amazon entering the picture. Roughly speaking, a company’s contribution to GDP is the total of the wages paid to its employees plus its operating profit.

By: FifthDecade

FifthDecade — Fri, 20 Apr 2012 01:15:23 +0000

‘it’ being the reasoning.

By: FifthDecade

FifthDecade — Fri, 20 Apr 2012 01:14:53 +0000

Hold on a minute Felix, I’m not disagreeing with you per se, but just pointing out a couple of points you made that I don’t see any logic to.

First of all, the Facebook valuation generates GDP in the markets, that isn’t ecommerce. The advertising potential is what the valuation is based on, and that can be measured and put into the internet related GDP subset.

Secondly, the main reasons for the rapid adoption of internet commerce are a unified banking system, while the need for convenience and time saving is a motivator more than the cost of housing or fuel prices. You have worked hard to have the facts fit the hypothesis, but I don’t buy it.