With A Grain of Salt: What Consumer Privacy Surveys Don't Tell Us

Abstract:     
A tremendous amount of news coverage and analysis of privacy issues has been driven by surveys of consumers showing high levels of concern. For this study, the authors reviewed 23 privacy surveys to assess their real usefulness to policymakers. Polls rarely play as large a role in policymaking as they have in the context of privacy. The study explains why lawmakers are right to be skeptical of surveys as a guide to policymaking generally, and privacy in particular. The design of the survey format and questions can be used to manipulate survey results. In reviewing privacy surveys, the authors found almost universal use of "push-pull" questions or prompting for certain results. By contrast, the least manipulative form of surveys, unprompted surveys, show little concern for privacy as such, and more concern for crime issues like credit card fraud. Also, privacy surveys tend to lump together issues like credit card fraud, spam, and marketing under the heading of "privacy," making it difficult to identify consumer concerns with precision. Surveys generally, and privacy surveys in particular, also suffer from the "talk is cheap" problem. It costs a consumer nothing to express a desire for federal law to protect privacy. But if such law became a reality, it will cost the economy as a whole, and consumers in particular, significant amounts that surveys do not and cannot reveal. By contrast, more objective measures of consumer actions show that, whatever consumers may say, they are going online and buying online in droves. In 1999, several forecasters predicted that electronic commerce would grow slowly because of the public's concerns about privacy. But this gloomy scenario has not come to pass, with electronic commerce revenues growing far faster than projected. The authors conclude that the craze for privacy surveys may be chalked up partly to the fact that for much of the debate no other information about the costs and benefits of privacy has been available. They further conclude that the surveys are not a sound basis for public policy.

Keywords: privacy, privacy surveys, privacy polls, opt-in, opt-out, Jupiter study, Internet, data protection, credit card fraud, consumer protection, electronic commerce, technophobia, Internet regulation, cyberlaw, cyberspace, Big Brother, cookies, spam, identity theft, identity fraud, online privacy

JEL Classifications: D1, D7, K2, M3

Working Paper Series