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An integrated latent variable and choice model to explore the role of privacy concern on stated behavioural intentions in e-commerce

Author

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  • Potoglou, Dimitris
  • Palacios, Juan-Francisco
  • Feijóo, Claudio

Abstract

Consumers' privacy concerns remain the primary barrier for future growth of e-commerce. Research to date has so far considered privacy concerns either as an independent variable to explore consumers' actual (or stated) behavioural intentions (e.g. the decision to purchase goods online) or as dependent variable explained through a number of antecedents (e.g. privacy awareness). However, there has not been a formal link across antecedents, latent constructs and (stated) behavioural intentions. This study establishes this link through a stated choice experiment, and an integrated latent variable and choice model. The proposed approach simultaneously explains individuals' perceptions of privacy and general caution through observed individual characteristics and explores how these perceptions, in the form of latent constructs, may be associated with consumers' decisions to engage with an online transaction. The stated choice experiment is designed to collect consumers' choices across online retailers, a conventional store and an opt-out option in which online retailers are presented with varying levels of personal-information requirements. The data was collected come from over 500 respondents representing the online-user population in the UK. Model estimation results show that the higher an individual's privacy concern, general caution and technical protection, the less likely a consumer is to purchase a product online. In a joint model, the privacy concern variable is found to outweigh the effect of general caution and technical protection. Finally, consumers with higher levels of general caution are more sensitive towards an online retailer that shares their personal data with third parties.

Suggested Citation

  • Potoglou, Dimitris & Palacios, Juan-Francisco & Feijóo, Claudio, 2015. "An integrated latent variable and choice model to explore the role of privacy concern on stated behavioural intentions in e-commerce," Journal of choice modelling, Elsevier, vol. 17(C), pages 10-27.
    • Handle: RePEc:eee:eejocm:v:17:y:2015:i:c:p:10-27
    DOI: 10.1016/j.jocm.2015.12.002
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    References listed on IDEAS

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    5. Lehmann, Nico & Sloot, Daniel & Schüle, Christopher & Ardone, Armin & Fichtner, Wolf, 2023. "The motivational drivers behind consumer preferences for regional electricity – Results of a choice experiment in Southern Germany," Energy Economics, Elsevier, vol. 120(C).
    6. Hossain Mohiuddin & Md Musfiqur Rahman Bhuiya & Shaila Jamal & Zhi Chen, 2022. "Exploring the Choice of Bicycling and Walking in Rajshahi, Bangladesh: An Application of Integrated Choice and Latent Variable (ICLV) Models," Sustainability, MDPI, vol. 14(22), pages 1-20, November.
    7. Maciej Sobolewski & Michał Paliński, 2017. "How much consumers value on-line privacy? Welfare assessment of new data protection regulation (GDPR)," Working Papers 2017-17, Faculty of Economic Sciences, University of Warsaw.
    8. Rossetti, Tomás & Guevara, C. Angelo & Galilea, Patricia & Hurtubia, Ricardo, 2018. "Modeling safety as a perceptual latent variable to assess cycling infrastructure," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 252-265.
    9. Sobolewski, Maciej, 2021. "Measuring consumer well-being from using free-of-charge digital services. The case of navigation apps," Information Economics and Policy, Elsevier, vol. 56(C).
    10. Figliozzi, Miguel & Unnikrishnan, Avinash, 2021. "Exploring the impact of socio-demographic characteristics, health concerns, and product type on home delivery rates and expenditures during a strict COVID-19 lockdown period: A case study from Portlan," Transportation Research Part A: Policy and Practice, Elsevier, vol. 153(C), pages 1-19.

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