A new study suggests that the use of social media may be a key driver of consumer spending, with the potential to have an impact on GDP growth.
The research, published in the journal The Economic Journal, shows that the amount of time people spend on Facebook, Twitter, Instagram, YouTube and other online platforms is the most important factor in determining consumer spending and income.
The research, by Oxford University economists, has revealed that people spend an average of 8.7 hours per week on social media, or more than six hours a day.
The researchers found that spending on social platforms accounts for about 8.4 per cent of total income in the US, while the share is only 0.3 per cent for UK and Germany.
“Our research suggests that social media usage is a major determinant of the amount people spend and, therefore, that the impact of social networks on consumer spending can have a substantial impact on economic growth,” Dr Michael Pritchard, an economist at Oxford University, said in a statement.
“It’s the biggest reason people spend more time on the internet than anywhere else.”
The researchers said that while the impact on the economy was likely to be positive, it could be negative.
“The impact on growth is very small, but it’s a big deal, because social networks are a key part of our daily lives,” said Dr Michael Moore, a lecturer at the university.
“This study shows that we spend more on social networks than any other thing on the planet, and yet we’re also spending more time online than ever before.”
Dr Moore said that people were spending more than ever on social networking because of the social media industry’s popularity.
“You could spend an entire year on social network marketing alone,” he said.
“I think we’re going to see an enormous growth in the amount that people will spend on social, because it’s such an important way of being in touch with others.”
He said the researchers also looked at how spending on Facebook could affect the economic outlook.
“Facebook, like all other forms of online advertising, is an opportunity to promote our brand,” Dr Moore said.
“It’s an opportunity for companies to promote their products and services, and it’s an important source of revenue for them.”
If we see a decrease in people spending on it, it’s going to be a very significant economic downturn.
“Topics:consumer-finance,economy-and-futures,social-media,internet-technology,internetworking,business-economics-and -business-news,internet,consumer-protection,finance-and-$1-trading,consumer,federal-government,united-statesFirst posted May 15, 2020 08:17:48Contact Elizabeth WilliamsMore stories from Northern Ireland