• by Wendy Davis , Staff Writer @wendyndavis, December 17, 2013

Online companies that collect data from consumers often argue that doing so is the only way to keep Web services free. As it turns out, however, some consumers would rather pay for services and keep data private.

That's according to University of Colorado at Boulder researchers Scott Savage and Donald Waldman. They recently issued a report, “The Value of Online Privacy,” which says that many smartphone users would rather pay for apps than surrender data about themselves.

How much would people pay? That depends on the information being collected, but the range varies from around $1 to $5.

Specifically, the researchers say that a “representative consumer” would make a one-time $2.28 payment for each app in order to conceal browser history. The same representative consumer would be willing to pay $4.05 to conceal contacts, $1.19 to keep location private, $1.75 to prevent discovery of their phone’s identification number, and $3.58 to hide text message contents. Consumers also are willing to pay $2.12 for an ad-free app.

Consumers also are willing to pay $2.12 to eliminate advertising, according to the report. The study is based on in-person surveys of 1,726 people. The researchers suggest that app developers should offer different versions of apps, with the price tied to the type of data that the app collects. “App developers could design a variety of apps with varying prices, levels of advertising and privacy permissions to better match the heterogeneous preferences of well-informed consumer groups,” states the report. “For example, a consumer with high value of privacy could buy a relatively expensive app that places a premium on not using and/or protecting their personal information.”