Off the Grid

I have been thinking over the past month about quitting Facebook. So I sat down and did some basic economics. The opportunity cost is the value of what is given up to get something (basically). So I estimated my time on Facebook in a given week, and set the value of those hours to minimum wage (what I might be earning if I spent that time doing some low wage job instead). That should give me a lowish approximation to the value of time given up not doing something else (baking bread, watching TV with the esposa, working on research, working on teaching, etc.).

The time on Facebook was negligible to amount of time in the week doing other activities. So the total value came out to around $40 to $50 (at a minimum wage of 7, five to six hours on Facebook would cost something like $35 to $42).

I have as yet received no income value from Facebook in terms of connections made, jobs found, or other social network services. In fact the most utility I receive from Facebook is browsing my old friends' profiles, and making what I consider to be extremely clever comments on their walls. I'm not sure, but I think I would pay around $10 a month for that kind of service. So already, the costs are outweighing benefits without getting into the issue of information.

Then I began wondering how much value I generated for Facebook, and began looking at the ads on the side of the screen. These numbers get pretty staggering even if you lowball them, and that's why the founders are all very rich young men. Fair enough, a company has to make a profit. But the value they generate from my logging in far outweighs the benefits I'm getting, as I have valued it. Do I lose anything from that? No. They gain, I don't lose. Still fairish. I'm not being specific on the numbers, because honestly I'm assuming a lot. Here's what I did:
I assumed that Facebook earned about $1 per ad that was displayed on my profile. I averaged about two to three ads on my profile each time I logged in. I counted how many times a day I logged in, and figure that was the per day value they get (so five times is $5). Then multiply that over a week, a month, a year. Maybe my estimate is too high, and maybe its not done that way. I really don't know, but this is the system I set up. If anyone wants to correct me, I'd love to sit down and crunch the numbers properly. But right now I'm too lazy to search it... apparently not lazy enough to not write a blog about it though. Go figure.

Then I started thinking about the value of my information available out there. My name, my birthday, my hometown, my list of friends, their list of friends, the communications between us, the search-able photos available of me. A few days ago I decided to try an expected utility exercise, and assumed that there was a 5% chance my identity gets stolen on Facebook: that is enough information to get into my bank account for at least 48 hours.
Now the monetary value of my bank account is very little in absolute terms, but failure to pay rent, bills, student loans, all affect my credit score and future ability to attain a loan. Furthermore getting put out on the street would incur other losses. Granted, there is a small probability of disaster in this case (5%), but for me the expected utility becomes a rather large negative number. Maybe I'm just reading too much into Nassim Taleb's Black Swan, but the interconnectedness and volatility of my life suddenly became very worrying.

I get that the Black Swan Facebook sounds crazy, but it is one of many examples I considered. There were a number of distinct, large, and probable expected losses associated with being on Facebook, and very few distinct, large expected gains (in fact no positive Black Swans that I could think of). I do not own a company that needs to find consumers, I do not get any value professionally from their social network, so its all a boost in my own personal utility. But I'm paying a repeated cost of lost time and continued, unjustifiable exposure to possible low probability disasters. I do remain on LinkedIn as I see some possible future benefit to business connections. But I can't economically justify Facebook.

That or I'm sick of all the random messages I'm getting from people I hardly knew from high school suddenly wondering how I'm doing, what's up, and if I'm going to the reunion. How many times before next year am I going to have to have that conversation? (I would pay $50 to get out of those conversations, so I apparently value it at -$50. Another blow to Facebook.)
That and the advertisements. I freakin hate the ads.