Crime in the Digital Age: Do Cyber Attacks Lead to Identity Theft?

By Claudio Mezzetti,  keshini muthukuda,  Haishan Yuan

We study whether data hacking of local organizations causes an increase in identity theft in the organization's local area. We use a difference in differences approach exploiting the timing of incidents of hacking and identity theft in the USA from 2015 to 2018, and estimate a fixed effects model that includes time and Core Based Statistical Area, or County, fixed effects. We find that a hacking incident in a local organization leads to 0.792 to 1.044 more identity thefts per 10,000 population in the local area the following year. The increase represents a 42% to 77% increase in the average prevalence of identity theft. We also show that among all our controls the unemployment rate is the most significant predictor of identity theft.

Mezzetti, Claudio and muthukuda, keshini and Yuan, Haishan, Crime in the Digital Age: Do Cyber Attacks Lead to Identity Theft? (April 24, 2024).