Monday, April 14, 2008

Re: SPAM

Tom, you raise an interesting question and touch on exactly what I was aiming to do with my post, namely address the disparity between producer costs and consumer costs. No one really looks at consumer costs when measuring the cost of SPAM. My point was that it adds up to being significant, even if we try to downplay it like you do in your post.
In a way, I was suggesting that spam be viewed as a whole phenomenon, not as separate emails you need to take care of. As for costs on the side of the consumer, I would have to disagree with you that they are overall insignificant. Maybe my estimation was wrong (and it probably was) but I would believe that if anything the cost of SPAM is socially higher than what I estimated that what I came up with.
For one thing, the filters you mention that corporate emails have cost money. Actually, they cost a lot of money to acquire, maintain and update. For another thing, we also incur SPAM costs in emails other than corporate ones and at times when we are not at work. Now basic econ theory tells us that we must value our time outside of work (i.e. leisure) at least marginally at the same rate as the per hour wage or we would not be choosing to consume so much leisure.
I will agree with you that potentially companies who engage in spam make a buck out of it, but my question was not aimed at these companies, it was aimed at society as a whole. Unlike accountants who can make any cost look like revenue and any loss look like a healthy profit, us economists have to consider the broader picture. And to me, in the broader picture spam is like pollution, with the exception that it is socially optimal to accept a certain level of pollution in order to promote growth (and I am not sure that it is socially optimal to accept a certain level of spam).

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