Economics of Cybercrime: The Role of Broadband and Socioeconomic Status

Abstract

Under what conditions is the Internet more likely to be used maliciously for criminal activity? This study examines the conditions under which the Internet is associated with cybercriminal offenses. Using comprehensive state-level data in the United States during 2004-2010, our findings show that there is no clear empirical evidence that the Internet penetration rate is related to the number of Internet crime perpetrators; however, cybercriminal activities are contingent upon socioeconomic factors and connection speed. Specifically, a higher income, more education, a lower poverty rate, a lower unemployment rate, and a lower inequality are likely to make the Internet penetration be more positively related with cybercrime perpetrators, which are indeed different from the conditions of terrestrial crime in the real world. In addition, broadband connections are significantly and positively associated with Internet crime perpetrators, though narrowband connections are not. Taken together, cybercrime requires more than just a skilled perpetrator, and it requires an infrastructure to facilitate profiteering from the act. A relevant discussion is provided.