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Empirical Analysis of the Effects of Cyber Security Incidents

Author

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  • Ginger Davis
  • Alfredo Garcia
  • Weide Zhang

Abstract

We analyze the time series associated with web traffic for a representative set of online businesses that have suffered widely reported cyber security incidents. Our working hypothesis is that cyber security incidents may prompt (security conscious) online customers to opt out and conduct their business elsewhere or, at the very least, to refrain from accessing online services. For companies relying almost exclusively on online channels, this presents an important business risk. We test for structural changes in these time series that may have been caused by these cyber security incidents. Our results consistently indicate that cyber security incidents do not affect the structure of web traffic for the set of online businesses studied. We discuss various public policy considerations stemming from our analysis.

Suggested Citation

  • Ginger Davis & Alfredo Garcia & Weide Zhang, 2009. "Empirical Analysis of the Effects of Cyber Security Incidents," Risk Analysis, John Wiley & Sons, vol. 29(9), pages 1304-1316, September.
    • Handle: RePEc:wly:riskan:v:29:y:2009:i:9:p:1304-1316
    DOI: 10.1111/j.1539-6924.2009.01245.x
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    References listed on IDEAS

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    1. Wang, Jiahui & Zivot, Eric, 2000. "A Bayesian Time Series Model of Multiple Structural Changes in Level, Trend, and Variance," Journal of Business & Economic Statistics, American Statistical Association, vol. 18(3), pages 374-386, July.
    2. Pei-Yu (Sharon) Chen & Lorin M. Hitt, 2002. "Measuring Switching Costs and the Determinants of Customer Retention in Internet-Enabled Businesses: A Study of the Online Brokerage Industry," Information Systems Research, INFORMS, vol. 13(3), pages 255-274, September.
    3. Yao, Yi-Ching, 1988. "Estimating the number of change-points via Schwarz' criterion," Statistics & Probability Letters, Elsevier, vol. 6(3), pages 181-189, February.
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    Cited by:

    1. Natalie M. Scala & Allison C. Reilly & Paul L. Goethals & Michel Cukier, 2019. "Risk and the Five Hard Problems of Cybersecurity," Risk Analysis, John Wiley & Sons, vol. 39(10), pages 2119-2126, October.
    2. Luca Allodi & Fabio Massacci, 2017. "Security Events and Vulnerability Data for Cybersecurity Risk Estimation," Risk Analysis, John Wiley & Sons, vol. 37(8), pages 1606-1627, August.
    3. J. S. Busby & B. Green & D. Hutchison, 2017. "Analysis of Affordance, Time, and Adaptation in the Assessment of Industrial Control System Cybersecurity Risk," Risk Analysis, John Wiley & Sons, vol. 37(7), pages 1298-1314, July.

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