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Abstract:

Modern firms increasingly depend on structured observations of economic agents in order to reduce uncertainty and improve decision-making. Transaction histories, behavioral signals, mobility traces, and other forms of personal data allow firms to forecast demand, optimize logistics, personalize services, and allocate resources more efficiently. Despite the central role of these informational inputs in modern production systems, standard economic theory continues to treat capital and labor as the only primary factors of production. This paper introduces informational stock—defined as measurable reductions in uncertainty about economically relevant outcomes—as an independent factor of production. Informational stock is formally defined using Shannon mutual information and incorporated into a neoclassical production framework. The model demonstrates that when informational inputs are omitted from factor pricing, their contribution is systematically attributed to capital income, generating an upward bias in measured capital shares. This misattribution implies that a substantial portion of modern economic output currently attributed to capital is in fact produced by informational inputs derived from personal data. Using stylized industry calibrations and market-level estimates, the paper argues that informational factor mispricing may represent one of the largest structural distortions in contemporary capital markets.