Using Big Data to Estimate Consumer Surplus: The Case of Uber

Using almost 50 million individual-level observations and a regression discontinuity design, we estimate that in 2015 the UberX service generated about $2.9 billion in consumer surplus in the four U.S. cities included in our analysis. For each dollar spent by consumers, about $1.60 of consumer surplus is generated.

Source: Using Big Data to Estimate Consumer Surplus: The Case of Uber

Editor’s note: in pharmaceuticals, the ratio of consumer surplus to prices appears much higher: for drugs used to treat HIV/AIDS, Philipson and Jena (2006) find that individuals value these drugs at nearly 10–20 times their price.

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