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Electronic Commerce and Data Privacy 219 H5: The higher the level of actual e-commerce activity, the more important a consumer will view an organization’s privacy policy. REGULATORY PREFERENCE How well corporations manage privacy often drives the desire for government regulation (Milberg et al., 2000). Several studies suggested that consumers’ perceptions of how their personal data is handled by organizations impact their propensity to complain about privacy concerns and to demand governmental involvement (Harris et al., 1991, 1994, 1996; Stone & Stone, 1990). Milberg et al. (2000) found a positive direct relationship between privacy concerns and regulatory preferences (REGPREF). Thus, the following hypothesis was proposed: H6: There is a positive direct relationship between consumer privacy concerns and regulatory preferences. ANTECEDENTS Because life experiences tend to shape attitudes toward privacy, two antecedents were also included in the research model: (1) prior privacy invasion experience (PIE) (Culnan, 1993; Harris et al., 1991; Smith et al., 1996; Stone & Stone, 1990) and (2) technology knowledge (TK). Culnan (1993) did not find prior privacy experiences to be significant. However, Smith et al. (1996) found that persons having been the victim of personal information misuse should have stronger concerns regarding information privacy. Thus, we proposed the following hypotheses: H7a:Privacy concerns are higher if an individual has experienced a prior privacy invasion. H7b:An individual’s actual e-commerce activity decreases if the individual has experienced a prior privacy invasion. Prior research has established a positive relationship between experience with computing technology and a variety of outcomes such as affect towards computers and computing skill (Harrison & Rainer, 1992; Levin & Gordon, 1989). Agarwal and Prasad (1999) did not find that prior experience with similar technologies had a significant impact on attitude or behavior intentions. The Agarwal and Prasad (1999) study also did not test technology experience on actual system use. The IBM study found that groups that use computers and access the Internet to the greatest extent have relatively greater levels of confidence in companies that do business on the Internet (Louis et al., 1999). We propose that there is a significant effect of technology knowledge on the actual e-commerce activity. Thus, the following was hypothesized: Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
220 Henderson, Snyder and Byrd H8a:Higher levels of technology knowledge increase the privacy concerns of an individual. H8b:Higher levels of technology knowledge increase the levels of actual ecommerce use. Demographics such as gender, age, and education play a role in an individual’s privacy concerns. Nickell and Pinto (1986) found that males tend to have more positive computer attitudes. Harrison and Rainer (1992) found that males exhibited significantly higher computer skill levels than females. Previous research has found evidence of a negative relationship between age and acceptance of technological change (Harrison & Rainer, 1992; Nickell & Pinto, 1986). One study posited that education is negatively related to computer anxiety (Igbaria & Parsuraman, 1989). The IBM study found that the younger, more educated, more affluent consumers are most likely to take steps to protect their privacy (Louis et al., 1999). Therefore, the following was hypothesized: H9a:Gender, age, and education have a direct impact on the level of privacy concerns. H9b:Gender, age, and education have a direct impact on the level of actual ecommerce activity. METHOD Sample and Procedure The study was conducted during the spring and summer of 2000 to investigate the consumer privacy concerns and the relationships with behavioral intention to provide PII, actual e-commerce activity, and regulatory preferences. Since the research topic dealt with e-commerce over the Internet, the authors decided to put the questionnaire on the Internet. A study conducted by Brigham Young University’s assessment office found that with electronic surveys, the response rate is better than with traditional mail surveys, the turnaround time is quicker, and data validity is nearly identical to mail surveys (Lindorf & Wygant, 2000). Information on the survey was sent via email to the faculty and staff of the Department of Management at a large university in the southeast United States. In addition, a request for participants was announced in a few selected undergraduate management classes. While many criticize the use of students for business and social science research, other studies found students are adequate surrogates for decision makers (Hughes & Gibson, 1991; Remus, 1986). In this case, students are consumers who have to make decisions concerning their use of e-commerce over the Internet and providing PII to those Web sites. An unexpected group of respondents came from several participants contacting the authors for permission to give the survey URL out to people who would be interested in the study. Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
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