Is your privacy worth more than a bagel?

German researchers have determined that people won't pay more than 65 cents to protect their personal information. I think they're asking the wrong questions.

What is your privacy worth? According to Berlin privacy researchers, about 65 cents – or the cost of bagel, sans schmear.

Researchers at the German Institute for Economic Research brought 443 consumers into a lab to purchase movie tickets online from one of two sellers. One of the ticket vendors asked for more personal information than the other one. The researchers then played around with discounts to see whether price or privacy were valued more highly.

Per the study:

Participants had the choice between a privacy-friendly firm and a privacy-unfriendly firm. Because the tickets were delivered electronically, both companies required a minimum of personal information: full name, date of birth and email address. Depending on treatment, the privacy-invasive seller also requested the mobile phone number or permission to use the email address for marketing.

The experimenters verified the data the participants provided, so they couldn’t cheat by providing bogus info.

Bottom line: All prices being equal, people would opt for the provider that asked for less personal information. (Insert applause here.) But if the more invasive company offered a discount of roughly 65 cents, two-thirds of those consumers opted to give up their personal information and take the lower price. (Boo, hiss.)

Interestingly, more people (29 percent) were willing to pay more to protect their mobile phone number than their email address (9 percent). That’s probably thanks to the fact that spam is something we’ve learned to live with, like air pollution or Justin Bieber, whereas people consider their cell phone numbers much more personal.

The blog post by researcher Sören Preibusch puts a positive spin on the results:

A sizeable proportion of consumers are willing to pay a higher price for privacy. Online businesses can capitalize these concerns. Privacy-friendliness is a win-win for online retailers and their customers.

My conclusion from these results is a bit less rosy: People value their privacy, they just don’t value it very much.

The problem with studies like this, however, is that they measure how willing people are to give up their personal information, but they usually fail to measure how aware these people are about what could happen to the information they surrender.

It all depends on how you ask the question. If you ask someone “do you care about your personal privacy?” a certain percentage will always say no. (And they’re usually obnoxiously cocky about it, too.) If you ask the same people to hand their mobile phone number to a stranger on the street, you’re likely to get a different response. If you ask someone to hand their cell phone number to a marketing firm which will proceed to call them at dinner time and try to sell them a time share, I suspect the number of people who suddenly care will increase even more.

Fortunately, public awareness is slowly changing. The increased focus on Do Not Track legislation and related issues seems to be having an effect. In the latest Pew survey, 73 percent of Netizens say they don’t want search engines mining their personal information and personalizing the results. That’s a start.

It’s not just what kinds of information the marketers collect, it’s how that information will be used once they have it. That’s the big question mark. The answer is worth a hell of a lot more than 65 cents.

Got a question about social media? TY4NS blogger Dan Tynan may have the answer (and if not, he’ll make something up). Visit his snarky, occasionally NSFW blog eSarcasm or follow him on Twitter: @tynanwrites. For the latest IT news, analysis and how-to’s, follow ITworld on Twitter and Facebook.

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