How Much Is Data Privacy Worth? A Preliminary Investigation

Forthcoming, Journal of Consumer Policy

26 Pages Posted: 2 Jul 2019

See all articles by Angela G. Winegar

Angela G. Winegar

Harvard Kennedy School of Government; Harvard University - Business School (HBS)

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Date Written: July 1, 2019

Abstract

Do consumers value data privacy? How much? In a survey of 2,416 Americans, we find that the median consumer is willing to pay just $5 per month to maintain data privacy (along specified dimensions), but would demand $80 to allow access to personal data. This is a “superendowment effect,” much higher than the 1:2 ratio often found between willingness to pay and willingness to accept. In addition, people demand significantly more money to allow access to personal data when primed that such data includes health-related data than when primed that such data includes demographic data. We analyze reasons for these disparities and offer some notations on their implications for theory and practice. A general theme is that because of a lack of information and behavioral biases, both willingness to pay and willingness to accept measures are highly unreliable guides to the welfare effects of retaining or giving up data privacy. Gertrude Stein’s comment about Oakland, California may hold for consumer valuations of data privacy: “There is no there there.” For guidance, policymakers should give little or no attention to either of those conventional measures of economic value, at least when steps are not taken to overcome deficits in information and behavioral biases.

Suggested Citation

Winegar, Angela G. and Sunstein, Cass R., How Much Is Data Privacy Worth? A Preliminary Investigation (July 1, 2019). Forthcoming, Journal of Consumer Policy, Available at SSRN: https://ssrn.com/abstract=3413277 or http://dx.doi.org/10.2139/ssrn.3413277

Angela G. Winegar

Harvard Kennedy School of Government ( email )

111 Western Avenue 10 soldiers Field park apartmen
Boston, MA 02163
United States

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Cass R. Sunstein (Contact Author)

Harvard Law School ( email )

1575 Massachusetts Ave
Areeda Hall 225
Cambridge, MA 02138
United States
617-496-2291 (Phone)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
362
Abstract Views
2,198
rank
89,910
PlumX Metrics