Where Does the Time Go? Competing for Attention in the Online Economy

Many of the goods and services available online are free in the sense that they do not require financial payments. But they do require investments of time, which is not free. Thus, the price of any time spent on a site online is time not spent doing something else. This paper explores what types of activities, and what specific activities within those types, compete with each other. For example, when you spend less time on social media, where do you spend more time? To answer these questions, we examine a 33 terabyte dataset of more than three trillion observations that includes information on every website that a panel of households visits over a period of four years. We sort these websites into categories of online activity. Among our key findings, social media and news are complements while social media and streaming are substitutes. This has implications for how we think about the markets for social media, news, and streaming, and the attention economy generally