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Privacy: Do online shoppers care?
What price discretion?

By Candace Lombardi

Published: Friday 08 June 2007

Would you pay a little more for that book you bought online if it meant lowering your chances of being hassled by marketers, spammers and hackers?

Researchers at Carnegie Mellon University believe consumers will pay more per item online to protect their private information, according to a paper presented at the 2007 Workshop on the Economics of Information Security.

The Carnegie Mellon Usable Privacy and Security Lab (Cups) monitored the habits of people ranging in age from 18 to 71 who were given money and instructed to buy certain items online while using the search engine PrivacyFinder.org.

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PrivacyFinder.org, a search engine developed by Cups, evaluates a website's privacy policies according to the Platform for Privacy Preferences developed by the World Wide Web Consortium. It displays a site's rank alongside search results.

The researchers found people were willing to pay about 60 cents more for each $15 item purchased to protect their privacy. One of the items participants were instructed to buy was a sex toy, something they might be inclined to keep private. And subjects were also allowed to keep any money they saved.

Cups director Lorrie Cranor said: "There have been so many other studies saying that people do not care about privacy. We confirmed our hypothesis that people do, in fact, care about privacy and will pay for it."

In the next round of research, vendors are going to partner with the researchers to offer specific price differences that will reveal more information about how much consumers are willing to pay. Cranor also plans to do an expanded field study that real-life consumers using PrivacyFinder.com could opt into.

Cranor's report could be positive news for a company such as VeriSign, which in December launched a tool with Microsoft that changes the colour of the browser address bar when it's displaying a website that has an "extended validation certificate" or EV SSL.

Candace Lombardi writes for CNET News.com