Using carefully designed discrete choice surveys, we measure how much individuals care whether their data are stored domestically, i.e., the premium people place on limiting the sharing of their data to their home country compared to elsewhere. We conduct this measure across countries (United States, United Kingdom, South Korea, Japan, Italy, India, and France) and data types (home address and phone number, personal information on finances, biometrics, health status, location, networks, communications, and music preferences). We find only modest evidence of added value resulting from data localization; to the extent that there is added value from localization, it appears to largely come for data types where privacy (i.e., full restrictions on data sharing) is already of high value: financial (account balance) and biometric (facial image) data, and home address and phone number. We also find that, for the U.S., U.K., Italy, India and France, there is no evidence that excluding China and Russia when allowing for international data sharing impacts data localization premium. Interestingly, for Japan and South Korea, we find evidence of a preference against excluding China and Russia if data are to be shared internationally. We discuss privacy policy implications.
Scott Wallsten is President and Senior Fellow at the Technology Policy Institute and also a senior fellow at the Georgetown Center for Business and Public Policy. He is an economist with expertise in industrial organization and public policy, and his research focuses on competition, regulation, telecommunications, the economics of digitization, and technology policy. He was the economics director for the FCC's National Broadband Plan and has been a lecturer in Stanford University’s public policy program, director of communications policy studies and senior fellow at the Progress & Freedom Foundation, a senior fellow at the AEI – Brookings Joint Center for Regulatory Studies and a resident scholar at the American Enterprise Institute, an economist at The World Bank, a scholar at the Stanford Institute for Economic Policy Research, and a staff economist at the U.S. President’s Council of Economic Advisers. He holds a PhD in economics from Stanford University.
Jeff Prince is Professor of Business Economics and Public Policy at the Kelley School of Business, Indiana University. He is also the Harold A. Poling Chair in Strategic Management. His specialized fields of research include industrial organization, applied econometrics, strategy, and regulation. He served as Chief Economist at the Federal Communications Commission during 2019 and 2020. At the FCC, he advised the Commission on economic policy, auction design, data analytics, and antitrust matters.
Professor Prince has been recognized for excellence in both his research and his teaching during his time at the Kelley School and while at Cornell. He is an author of multiple textbooks covering a range of core microeconomic and econometric principles in managerial economics and predictive analytics. His research focus is on technology markets and telecommunications, having published works on dynamic demand for computers, Internet adoption and usage, the inception of online/offline product competition, telecom bundling, the valuation of product features, digital platforms, and data privacy. His research also encompasses topics such as household-level risk aversion, airline quality competition, and regulation in healthcare and real estate markets. His works have appeared in top general interest journals in both economics and management, including the American Economic Review, the International Economic Review, Management Science, and the Academy of Management Journal. He has also published in top journals in industrial organization, including the Journal of Industrial Economics, Journal of Economics and Management Strategy, and the International Journal of Industrial Organization. He is currently a co-editor at the Journal of Economics and Management Strategy, and is on the board of editors at Information Economics and Policy.
Professor Prince has consulted for various clients on valuing antitrust, intellectual property, damages, and data privacy concerns. As part of this work, he has written numerous expert reports and provided oral expert testimony, through both deposition and trial, on many occasions.
Professor Prince received his BS in mathematics and statistics and BA in economics from Miami University in 1998 and his PhD in economics from Northwestern University in 2004.
