Now, in a new paper in the Journal of Economic Perspectives, Justin Rao of Microsoft and David Reiley of Google (who met working at Yahoo) have teamed up to estimate the cost of spam to society relative to its worldwide revenues. The societal price tag comes to $20 billion. The revenue? A mere $200 million. As they note, that means that the “‘externality ratio’ of external costs to internal benefits for spam is around 100:1. Spammers are dumping a lot on society and reaping fairly little in return.” In case it’s not clear, this is a suboptimal situation. The Atlantic
I took a quick glance through the paper and the background section is an interesting summary of the push and pull of spam blocking. There were also a bunch of really interesting statistics about things like the “this is spam” button and the “this is not spam” button. I’ll be posting about that in the coming days.