Nothing to hide? Gender and age differences in the willingness to share data

Summary

Focus

The ubiquity of data in the digital economy has underpinned the rise of financial technology (fintech), large technology firms (big tech) and artificial intelligence (AI). While greater use of personal data can reduce search and verification costs and allow for better and more personalised services, it has raised severe privacy concerns. Consumers worry about data being harvested for unwanted advertising or price discrimination. They also worry about a data breach, when their personal information is leaked or becomes publicly available online, with potential consequences for their personal safety and reputation. And even if some individuals think they have "nothing to hide", their own actions may affect the privacy of others, eg when their data lead to information about their contacts or those similar to them. These considerations require policymakers to balance the efficient use of personal data with appropriate protection of user privacy.

Contribution

We assess preferences for sharing personal data from a representative survey of about 1,300 US consumers. Our analysis draws on special questions that were added to the New York Fed's Survey of Consumer Expectations. The survey asked about their attitudes towards data privacy, for example how willing they are to share their data, how much they trust different counterparties to safeguard their data, or whether they think that sharing data could have negative consequences for them. We document differences in preferences across groups, which could influence their participation in the digital economy, and thus the representativeness of the resulting data sets.

Findings

The survey results show that women are less willing than men, and older individuals less willing than those who are younger, to share their financial transaction data in exchange for better offers on financial services. Differences in attitudes across groups, such as the willingness to take financial risks, concerns that data will become publicly available and concerns around personal safety, explain part of these gaps. Responses also suggest that privacy regulation, such as the California Consumer Privacy Act, can increase the willingness to share data in general, but not differentially by gender.

Abstract

Many digital applications rely on the willingness of users to voluntarily share personal data. Yet some users are more comfortable sharing data than others. To document these differences, we draw on questions to a representative sample of U.S. households added to the New York Fed's Survey of Consumer Expectations. We find that women a re less willing than men, and older individuals less willing than the young, to share their financial transaction data in exchange for better offers on financial services. Across these groups, there are significant differences in attitudes, such as willingness to take financial risks, concerns that data will become publicly available, and concerns around personal safety. Responses suggest that privacy regulation can increase the willingness to share data, but effects do not differ by gender.

JEL classification: C8, D8

Keywords: data, privacy, CCPA, fintech, big tech, survey of consumer expectations