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A discrete choice approach to model credit card fraud

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  • Pulina, Manuela
  • Paba, Antonello

Abstract

This paper analyses the demographic, socio-economics and banking specific determinants that influence the risk of fraud in a portfolio of credit cards. The data are from recent account archives for cards issued throughout Italy. A logit framework is employed that incorporates cards at a risk of fraud as the dependent variable and a set of explanatory variables (e.g. gender, location, credit line, number of transactions in euros and in non euros currency). The empirical results provide useful indicators on the factors that are responsible for potential risk of fraud.

Suggested Citation

  • Pulina, Manuela & Paba, Antonello, 2010. "A discrete choice approach to model credit card fraud," MPRA Paper 20019, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20019
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    File URL: https://mpra.ub.uni-muenchen.de/20019/1/MPRA_paper_20019.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    credit card; fraud; demographic and socio-economics factors; logit modelling.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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