How much is your privacy worth? About five bucks.

Friday, December 27, 2013 - 12:17 PM

(David Guo/flickr)

The Atlantic reports on a new study by two UC-Boulder economists who tried to determine how much more people were willing to pay for an app that didn't invade their privacy.

According to their results: “the representative consumer is willing to make a one-time payment for each app of $2.28 to conceal their browser history, $4.05 to conceal their list of contacts, $1.19 to conceal their location, $1.75 to conceal their phone’s identification number, and $3.58 to conceal the contents of their text messages. The consumer is also willing to pay $2.12 to eliminate advertising. “

From there, the two economists decided that, because most apps include ads and are aware of your location, the average premium consumers are willing to pay in exchange for privacy is five bucks. They also believe that means that there’s a $16 billion market out there for app developers willing to offer consumers their privacy back.

Well, maybe. I wonder if it’s possible that what we’re seeing here is the gap between how we report our behavior and our actual behavior. Because consumers constantly  trade privacy for free apps or even just more convenient ones.

My colleague Chris Neary reported a story last year about Duck Duck Go, a search engine whose main pitch to users is that it doesn't snoop on them. Duck Duck Go has been picking up users, but they’re not (and likely don’t expect to be) serious competition for Google, whose privacy guarantees are much less thorough.

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Comments [1]

Cameron

I'm curious if consumers over or under value privacy (i.e. would payments such as those described in the article mean more or less revenue than is currently being generated by the sale of ads and data)? If there's a gap, how big is the gap?

Dec. 27 2013 04:40 PM

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