Data Privacy and Smart Home Energy Appliances: A Stated Choice Experiment

Data privacy in smart homes is receiving increasing attention due to the growing adoption of smart appliances. Adoption of smart appliances can bring benefits, including energy consumption reduction. This study investigates how people made the trade-offs between sharing privacy-sensitive data and the potential environmental and economic benefits of smart home energy appliances using discrete choice modeling. The findings reveal that the trade-off is mainly affected by four product attributes: the type of data that is processed, the reason why this data is processed, the data sharing frequency, and the financial benefit gained from the smart home appliances. Specifically, individuals tend to share less data daily for their daily routine convenience and demand a (theoretical) financial compensation for the data sharing. The results also show that privacy attitudes are not related to data sharing preferences, while socio-demographics, including gender, age, and income, are. The results emphasize the gap between people's attitudes and behaviors regarding data privacy. This research serves as a foundation for further investigations and can be used by smart appliance retailers, manufacturers, and governments for designing research and development focus and energy reduction incentives, respectively.