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The effect of privacy regulation on the data industry: empirical evidence from GDPR

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  • Guy Aridor
  • Yeon‐Koo Che
  • Tobias Salz

Abstract

Utilizing a novel dataset from an online travel intermediary, we study the effects of the EU's General Data Protection Regulation (GDPR). The opt‐in requirement of GDPR resulted in a 12.5% drop in the intermediary‐observed consumers, but the remaining consumers are trackable for a longer period of time. Our findings imply that privacy‐conscious consumers exert privacy externalities on opt‐in consumers, making them more predictable. Consistent with this finding, the average value of the remaining consumers to advertisers has increased, offsetting some of the losses from consumer opt‐outs.

Suggested Citation

  • Guy Aridor & Yeon‐Koo Che & Tobias Salz, 2023. "The effect of privacy regulation on the data industry: empirical evidence from GDPR," RAND Journal of Economics, RAND Corporation, vol. 54(4), pages 695-730, December.
    • Handle: RePEc:bla:randje:v:54:y:2023:i:4:p:695-730
    DOI: 10.1111/1756-2171.12455
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    Cited by:

    1. Stefano Colombo & Paolo G. Garella & Noriaki Matsushima, 2023. "Strategic anonymity and behavior-based pricing," ISER Discussion Paper 1219r, Institute of Social and Economic Research, Osaka University, revised Jan 2025.
    2. Carl Benedikt Frey & Giorgio Presidente, 2024. "Privacy regulation and firm performance: Estimating the GDPR effect globally," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1074-1089, July.
    3. Chen, Wanyi & Wang, Yiying & Wu, Dongjing & Yin, Xingqiang, 2024. "Can the establishment of a personal data protection system promote corporate innovation?," Research Policy, Elsevier, vol. 53(9).

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