Information Frictions and Heterogeneity in Valuations of Personal Data

We investigate how consumer valuations of personal data are affected by real worldinformation interventions.  Proposals to compensate users for the information they dis-close to online services have been advanced in both research and policy circles.  Theseproposals are hampered by information frictions that limit consumers’ ability to assessthe  value  of  their  own  data.   We  use  an  incentive  compatible  mechanism  to  captureconsumers’ willingness to share their social media data for monetary compensation, andestimate distributions of valuations of social media data before and after an informationtreatment.   We  find  evidence  of  significant  dispersion  and  heterogeneity  in  valuationsbefore  the  information  intervention,  with  women,  Black,  and  low  income  individualsreporting systematically lower valuations than other groups.  After an information in-tervention, we detect significant revisions in valuations, concentrated among individualswith low initial valuations.  Dispersion and heterogeneity in valuations across these de-mographic groups decrease, but persist, after the information intervention.  The findingssuggest that strategies aimed at reducing information asymmetries in markets for per-sonal data may increase consumer welfare.  At the same time, the findings highlight howconsumer valuations of personal data are only in part influenced by market information.