Flutterby™! : Untaxed transactions

The Economist: The “free” economy comes at a cost — But economists struggle to work out how much:

This sounds like a wonderful deal for the consumer, but it generates problems elsewhere. Take taxes. Professionals are not allowed to evade tax by selling their services for benefits in kind, so why should consumers not be taxed if they are paid for their data in the form of services? Statisticians also struggle in a post-price world. GDP is mostly measured by transactions at market prices. A recent study by Leonard Nakamura of the Federal Reserve Bank of Philadelphia and Jon Samuels and Rachel Soloveichik of the Bureau of Economic Analysis used the amount spent on advertising to estimate uncounted output, and calculated that in 2013 American GDP should have been $19bn higher than reported.