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Is there a formal definition or measure of wealth that captures the notion that with improving technology "life gets better"?

A stupid example of what I mean would be the invention of the iPhone. I know that with the iPhone new markets were and new profit possibilities were created and in that sense the economy got richer. That effect could be measured by let's say the GDP. But apart from that I can now watch Netflix on the bus or text people everytime, everywhere. So personally my life got a whole lot more pleasant.

Also is there an accepted connection between innovation and "wealth" in the sense that I described above?

Cheers, FL

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The extra benefit to you, beyond what you pay for your iPhone and for your Netflix subscription, is called consumer surplus and in theory this could be aggregated across all consumers who take advantage of this innovation

It is difficult to measure: again in theory it could be done by judging how much more individuals would be willing to pay until they were indifferent between purchasing or not purchasing

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  • $\begingroup$ I am not quite sure that consumer surplus describes exactly what I meant. As far as I understand consumer surplus is basically the amount of money I would be willing to spend for something minus its market value. What I want is something that catches the advantages of living let's say 100 years in the future where new technologies make life more pleasant without being more expensive. Hightech today costs about as much as 50 years ago but it still has more benefits overall. $\endgroup$ – FloodLuszt Mar 3 '17 at 19:16
  • $\begingroup$ Consumer surplus is the difference between the value to you and the cost to you. So if the value to you goes up (because of new technology or for any other reason) and the cost stays the same then your consumer surplus increases. $\endgroup$ – Henry Mar 3 '17 at 19:31
  • $\begingroup$ Yes but the value (what I'm willing to pay as a percentage of my income for example) of having electricity did not change drastically while at the same time electricity has more benefits now than 50 years ago. $\endgroup$ – FloodLuszt Mar 4 '17 at 11:15
  • $\begingroup$ If the value to you of electricity has increased, you should be willing to pay more per unit of electricity. Thanks to some combination of production efficiency, regulation, competition and other factors, you do not have to, so your surplus has increased. $\endgroup$ – Henry Mar 4 '17 at 15:37
  • $\begingroup$ I'm really sorry but I still kind of don't fully understand it. An iPhone this year costs basically the same as 5 years ago and I am willing to pay the same amount of money for it as 5 years ago, since in both years this is the cutting edge of technology. But there is no doubt that the device itself has improved during these 5 years (if that's not true for the iPhone take any other high tech electronic device) and offers more to the consumer. Where is the consumer surplus in this case? $\endgroup$ – FloodLuszt Mar 5 '17 at 10:31

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