comparing total harm from identity theft and interpersonal violence

Survey data, estimates, and reasonable parameters suggest that in the U.S., the total harm from identity theft  is greater than the total harm from interpersonal violence, excluding murder. Among high-income countries, the U.S. has relatively high rates of interpersonal violence. Since identity theft can be perpetrated via global communications networks, rates of identity theft probably vary less across geographic and cultural space than do rates of interpersonal violence. Hence the total harm from identity theft is probably greater than the total harm from interpersonal violence across countries where electronic records and transactions are used at least as frequently as in the U.S.

U.S. survey data indicates that identity theft is more frequent than interpersonal violence and on average causes less harm, but the greater frequency of identity-theft occurrence outweighs the lower harm.  About 5% of persons in the U.S. ages 16 and older experienced one or more incidents of identity theft over a recent two-year period.  The corresponding incidence of interpersonal violence reported in the context of a crime survey is probably roughly 1%. Weighing equally reported effects “significant work-related problems” and “significant relationship problems” indicates that identity theft causes about 5% more of such harm than interpersonal violence. Measuring effects on a scale of reported level of distress and using plausible category weights suggests that identity theft causes in total twice as much distress as interpersonal violence.

Considering relative effects and preventive spending suggests that relatively more public resources should be directed at preventing identity theft. Compared to violent crime prevention, relatively little public resources are spent on preventing identity theft. The marginal effects of both types of spending are not well measured, but a variety of measures to deter identity theft plausibly have relatively high marginal effects.  Just as for identity theft losses compared to fire property losses, the governing economics seems to be driven by perceptions, communications, and institutionalization.

Data: comparison of identity theft and interpersonal violence (Excel version)

One thought on “comparing total harm from identity theft and interpersonal violence”

  1. The author apparently views “increased government spending” as a way to solve a problem. I would like to suggest that a far better solution would be a “redirection” of government spending. For example, it is a safe bet to guess that the amount our government spend on the joint US-Israeli effort to develop Stuxnet internet worm is many times the amount that our government has spent on making the Internet a safer place. With respect to violence in our streets, the root cause is people who feel that violence is a way to solve a problem or grievance. Again the amount that government spends on military violence in order to solve our national problems (thereby teaching that violence can be used to solve problems) is far more than what our government spends on educating people that violence toward others rarely solves one’s problems. In conclusion, the redirection of government spending to programs that produce “good” results, would be far more effective than MORE government spending.

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