Working Paper: CEPR ID: DP13588
Authors: Tarun Ramadorai; Ansgar Walther; Antoine Uettwiller
Abstract: We scrape a comprehensive set of US firms' privacy policies to facilitate research on the supply of data privacy. We analyze these data with the help of expert legal evaluations, and also acquire data on firms' web tracking activities. We find considerable and systematic variation in privacy policies along multiple dimensions including ease of access, length, readability, and quality, both within and between industries. Motivated by a simple theory of big data acquisition and usage, we analyze the relationship between firm size, knowledge capital intensity, and privacy supply. We find that large firms with intermediate data intensity have longer, legally watertight policies, but are more likely to share user data with third parties.
Keywords: privacy; data; markets; web tracking; third-party sharing
JEL Codes: D8; K2; L1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| larger firms (L25) | longer and more legally robust privacy policies (K24) |
| longer and more legally robust privacy policies (K24) | more likely to share user data with third parties (D16) |
| firms with intermediate technical sophistication (L63) | longer, more legally watertight policies (J18) |
| firms with intermediate technical sophistication (L63) | more inclined to share user data (D16) |
| firms with highest levels of knowledge capital intensity (D25) | shorter and less complex policies (G52) |
| firms with highest levels of knowledge capital intensity (D25) | less third-party data sharing (D16) |
| firm characteristics (size and technical sophistication) (L25) | privacy policy attributes (M38) |
| privacy policy attributes (M38) | data sharing behavior (D16) |