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Privacy and Household Finance

Paper Session

Sunday, Jan. 5, 2025 1:00 PM - 3:00 PM (PST)

Hilton San Francisco Union Square, Union Square 19 and 20
Hosted By: American Economic Association
  • Chair: Michaela Pagel, Washington University-St. Louis

COPPAcalypse? The Youtube Settlement's Impact on Kids Content

Garrett Johnson
,
Boston University
Tesary Lin
,
Boston University

Abstract

We examine the tradeoff between privacy and personalization for online content by evaluating the impact of YouTube's settlement with the Federal Trade Commission over violating the Children's Online Privacy Protection Act (COPPA). Under the settlement, YouTube removed all forms of personalization for child-directed content starting in January 2020, which included personalized ads and platform features like personalized search and recommendations. We study the resulting impact on 5,066 top American YouTube channels by comparing the child-directed content creators to their non-child-directed counterparts using a difference-in-differences design. On the supply side, we find that child-directed content creators produce 18% less content and pivot towards producing non-child-directed content. Child-directed content creators also invest less in content quality: the proportion of original content falls by 11% and manual captioning falls by 27%, while user content ratings fall by 10%. On the demand side, views of child-directed channels fall by 20%. Consistent with the platform's degraded capacity to match viewers to content, both content creation and content views become more concentrated among top child-directed YouTube channels.

The Impact of Privacy Protection on Online Advertising Markets

Miguel Alcobendas
,
Yahoo
Shunto Kobayashi
,
California Institute of Technology
Ke Shi
,
California Institute of Technology
Matthew Shum
,
California Institute of Technology

Abstract

Online privacy protection has gained momentum in recent years and spurred
both government regulations and private-sector initiatives. A centerpiece of this
movement is the removal of third-party cookies, which are widely employed to
track online user behavior and implement targeted ads, from web browsers.
Using banner ad auction data from Yahoo, we study the effect of a third-party
cookie ban on the online advertising market. We first document stylized facts
about the value of third-party cookies to advertisers. Adopting a structural
approach to recover advertisers’ valuations from their bids in these auctions, we
simulate a few counterfactual scenarios to quantify the impact of Google’s plan
to phase out third-party cookies from Chrome, its market-leading browser. Our
counterfactual analysis suggests that an outright ban would reduce publisher
revenue by 54% and advertiser surplus by 40%. The introduction of alternative
tracking technologies under Google’s Privacy Sandbox initiative would recoup
part of the loss. In either case, we find that big tech firms can leverage their
informational advantage over their competitors and gain a larger surplus from
the ban.

Privacy Regulation and Fintech Lending

Sebastian Doerr
,
Bank for International Settlements
Leonardo Gambacorta
,
Bank for International Settlements
Luigi Guiso
,
Einaudi Institute for Economics and Finance
Marina Sanchez del Villar
,
European University Institute

Abstract

Consumers dislike sharing data with fintechs, but better access to data can im-
prove loan market outcomes. We study how the California Consumer Privacy Act
(CCPA), which grants users control over and mitigates concerns about sharing data,
affects bank and fintech lending. Results suggest that the CCPA improves fintechs’
screening process compared to banks: they increase their use of non-traditional
data, engage in more individualized pricing, and deny more applications. In turn,
they offer lower loan rates, in particular to traditionally under-served groups. Mort-
gage originations by fintechs relative to banks also increase, suggesting that well-
designed privacy regulation can enhance financial inclusion.

Privacy and Financial Well-Being

Michaela Pagel
,
Washington University-St. Louis

Abstract

We show that lax data security and privacy standards affect political opinions, beliefs, and activism as measured by donations using bank-account transaction-level data from a major US data aggregation and analytics provider. We then turn to providing additional evidence for the channel. If people’s political beliefs are not private, then media firms provide them with additional beliefs-re-inforcing propaganda to obtain clicks and likes on social media or other platforms and ultimately increase their revenue from advertisers. This affects the political and social system through, among other things, political donations.
JEL Classifications
  • D4 - Market Structure, Pricing, and Design
  • D9 - Micro-Based Behavioral Economics