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The Value of Online Information Privacy: An Empirical Investigation

Author

Listed:
  • Il-Horn Hann

    (Univeristy of Southern California)

  • Kai-Lung Hui

    (National University of Singapore)

  • Tom S. Lee

    (National University of Singapore)

  • I.P.L. Png

    (National University of Singapore)

Abstract

Concern over online information privacy is widespread and rising. However, prior research is silent about the value of information privacy in the presence of potential benefits from sharing personally identifiable information. We analyzed individuals' trade-offs between the benefits and costs of providing personal information to websites. We found that benefits - monetary reward and future convenience - significantly affect individuals' preferences over websites with differing privacy policies. We also quantified the value of website privacy protection. Among U.S. subjects, protection against errors, improper access, and secondary use of personal information is worth US$30.49 - 44.62. Finally, we identified three distinct segments of Internet consumers - privacy guardians, information sellers, and convenience seekers.

Suggested Citation

  • Il-Horn Hann & Kai-Lung Hui & Tom S. Lee & I.P.L. Png, 2003. "The Value of Online Information Privacy: An Empirical Investigation," Industrial Organization 0304001, EconWPA, revised 01 Apr 2003.
  • Handle: RePEc:wpa:wuwpio:0304001
    Note: Type of Document - PDF; prepared on Windows XP; pages: 29; figures: included
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    File URL: http://econwpa.repec.org/eps/io/papers/0304/0304001.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kai-Lung Hui & I.P.L. Png, 2005. "The Economics of Privacy," Industrial Organization 0505007, EconWPA, revised 29 Aug 2005.
    2. Pau, L-F., 2006. "Privacy Management Service Contracts as a New Business Opportunity for Operators," ERIM Report Series Research in Management ERS-2006-060-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

    More about this item

    Keywords

    Information privacy; conjoint analysis; cost-benefit tradeoff; privacy concern; monetary reward; time-saving service;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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