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The Average Consumer Thinks Data Privacy Is Worth Around 65 Cents
chicksdaddy writes "Threatpost is reporting today on the findings of an ENISA study that looked at whether consumers would pay more for goods in exchange for more privacy. The answer — 'Sure...just not much more.' The report (PDF): 'Study on Monetizing Privacy: An Economic Model for Pricing Personal Information' presents the findings of a laboratory study in which consumers were asked to buy identical goods from two online vendors: one that collected minimal customer information and another that required the customer to surrender more of their personal information to purchase the item, including phone number and a government ID number. The laboratory experiment showed that the majority of consumers value privacy protections. When the prices of the goods offered by both the privacy protecting and the privacy violating online retailers were equal, shoppers much preferred the privacy protecting vendor. But the preference for more privacy wasn't very strong, and didn't come close to equaling consumers' preference for lower prices. In fact, consumers readily switched to a more privacy-invasive provider if that provider charged a lower price for the same goods. How much lower? Not much, researchers discovered. A discount of just E0.50 ($0.65) was enough to sway consumers away from a vendor who would protect the privacy of their personal data."
But are the consumers being properly informed about the ramifications of the vendor having that information? What are they using it for? Can they be trusted to only use it for that and not re-sell it? Really? Come on be honest.
I think this study says more about the illiteracy we have with what "privacy" means and our tendency to trust authority-looking-figures when they say they need information from us. I don't think it's accurate to interpret complacency with rational economic valuation.
This report was brought to you by Verizon.
This report was brought to you by Verizon.
I wanted to mod you up, but you didn't have a link for those that missed the whole funny affair.... http://verizonmath.blogspot.com/
The article (not the original paper) is averaging together all of the people that said "Naw, I wouldn't pay anything extra" along with all the people that said one, two, or five dollars, etc. So of course it's going to be some sad little number, leading to a headline that sounds like people are selling their souls.
A more useful question, "of those willing to pay for privacy, how much would they pay?" Read the original paper (not the cheap little article) and you see things like "A non-negligible proportion of the experiment’s participants (13–83%), however, chose to pay a ‘premium’ for privacy. " The paper is actually supporting the idea that some people are willing to pay enough that it would fit into the business model of different content providers.
I also think that a bunch of us hate the idea of paying for privacy, not because we don't value it very much, but because it is offensive to think we would need to pay for it. So again the article headline gives a false notion of everyone selling out for 65 cents, when the stats are unlikely distinguishing between apathetics and holy rollers that would both decline to pay for privacy.