Date Issued: 
December 1, 1980

James Brown and Kenneth Gordon.  

OSP Working Paper 5 (Dec 1980) gives an overview of privacy, particularly as related to telecommunications policy, from an economic perspective.  The authors review the economic rationale for government intervention and argue that a compelling case for it exists only when markets cannot work due to external effects, public goods problems, or economies of scale.

The authors employ the economics of information as a general framework for their analysis. They argue that information about people and organizations is a valuable economic input to decision making and that privacy may be analyzed as an economic good insofar as resources devoted to the production of privacy must be taken from elsewhere. That is, more privacy usually means less of some other good or service.