IDEAS home Printed from
   My bibliography  Save this paper

Prior Fraud Exposure and Precautionary Credit Market Behavior


  • Nathan Blascak
  • Ying Lei Toh


We study how past experiences with privacy shocks affect individuals’ likelihood to take precautionary behavior when faced with a new privacy shock in the context of credit markets. We focus on experiences with identity theft and data breaches, two kinds of privacy shocks that either directly lead to fraud or put an individual at an elevated risk of experiencing fraud. We show that immediately after the announcement of the 2017 Equifax data breach, individuals with either kind of prior fraud exposure were more likely to freeze their credit report and close credit card accounts than individuals with no prior exposure. We also find that prior victims of identity theft, a more serious type of exposure, were more likely to take precautionary actions than individuals who were victims of a previous data breach.

Suggested Citation

  • Nathan Blascak & Ying Lei Toh, 2022. "Prior Fraud Exposure and Precautionary Credit Market Behavior," Research Working Paper RWP 22-14, Federal Reserve Bank of Kansas City.
  • Handle: RePEc:fip:fedkrw:94989
    DOI: 10.18651/RWP2022-14

    Download full text from publisher

    File URL:
    File Function: Full text
    Download Restriction: no

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    Other versions of this item:

    References listed on IDEAS

    1. Mikhed, Vyacheslav & Vogan, Michael, 2018. "How data breaches affect consumer credit," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 192-207.
    2. Sasha Romanosky & Rahul Telang & Alessandro Acquisti, 2011. "Do data breach disclosure laws reduce identity theft?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(2), pages 256-286, March.
    3. Howard Kunreuther, 2006. "Disaster Mitigation and Insurance: Learning from Katrina," The ANNALS of the American Academy of Political and Social Science, , vol. 604(1), pages 208-227, March.
    4. Colin F. Camerer & Howard Kunreuther, 1989. "Decision processes for low probability events: Policy implications," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(4), pages 565-592.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nathan Blascak & Ying Lei Toh, 2022. "Prior Fraud Exposure and Precautionary Credit Market Behavior," Working Papers 22-36, Federal Reserve Bank of Philadelphia.
    2. Dingde Xu & Enlai Liu & Xuxi Wang & Hong Tang & Shaoquan Liu, 2018. "Rural Households’ Livelihood Capital, Risk Perception, and Willingness to Purchase Earthquake Disaster Insurance: Evidence from Southwestern China," IJERPH, MDPI, vol. 15(7), pages 1-19, June.
    3. Mona Ahmadiani & Susana Ferreira & Craig E. Landry, 2019. "Flood Insurance and Risk Reduction: Market Penetration, Coverage, and Mitigation in Coastal North Carolina," Southern Economic Journal, John Wiley & Sons, vol. 85(4), pages 1058-1082, April.
    4. Robin C. Van den Honert, 2016. "Improving Decision Making about Natural Disaster Mitigation Funding in Australia—A Framework," Resources, MDPI, vol. 5(3), pages 1-23, September.
    5. Robert S. Chirinko & Edward P. Harper, 1993. "Buckle up or slow down? New estimates of offsetting behavior and their implications for automobile safety regulation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(2), pages 270-296.
    6. de Jong, Piet & Tickle, Leonie & Xu, Jianhui, 2020. "A more meaningful parameterization of the Lee–Carter model," Insurance: Mathematics and Economics, Elsevier, vol. 94(C), pages 1-8.
    7. Vitaly Meursault & Daniel Moulton & Larry Santucci & Nathan Schor, 2022. "One Threshold Doesn’t Fit All: Tailoring Machine Learning Predictions of Consumer Default for Lower-Income Areas," Working Papers 22-39, Federal Reserve Bank of Philadelphia.
    8. Yildiz, Özgür, 2014. "Lehren aus der Verhaltensökonomik für die Gestaltung umweltpolitischer Maßnahmen [Lessons from behavioral economics for the design of environmental policy measures]," MPRA Paper 59360, University Library of Munich, Germany.
    9. Ravi Dhar & William Goetzmann, 2005. "Institutional Perspectives on Real Estate Investing: The Role of Risk and Uncertainty," Yale School of Management Working Papers ysm457, Yale School of Management, revised 01 Jul 2005.
    10. Chang, Chiung-Ting, 2017. "Risk factors associated with flying in adverse weather: From the passengers' point of view," Journal of Air Transport Management, Elsevier, vol. 58(C), pages 68-75.
    11. Howard Kunreuther & Mark Pauly, 2006. "Rules Rather Than Discretion: Lessons from Hurricane Katrina," NBER Working Papers 12503, National Bureau of Economic Research, Inc.
    12. Hitoshi Matsushima, 2017. "Dynamic Implementation, Verification, and Detection," CARF F-Series CARF-F-416, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    13. Surminski, Swenja & Eldridge, Jillian, 2015. "Flood insurance in England: an assessment of the current and newly proposed insurance scheme in the context of rising flood risk," LSE Research Online Documents on Economics 66256, London School of Economics and Political Science, LSE Library.
    14. Andrea Morone & Ozlem Ozdemir, 2006. "Valuing Protection against Low Probability, High Loss Risks: Experimental Evidence," Papers on Strategic Interaction 2006-34, Max Planck Institute of Economics, Strategic Interaction Group.
    15. Peter John Robinson & W. J. Wouter Botzen & Fujin Zhou, 2021. "An experimental study of charity hazard: The effect of risky and ambiguous government compensation on flood insurance demand," Journal of Risk and Uncertainty, Springer, vol. 63(3), pages 275-318, December.
    16. Michael K. Lindell & Seong Nam Hwang, 2008. "Households' Perceived Personal Risk and Responses in a Multihazard Environment," Risk Analysis, John Wiley & Sons, vol. 28(2), pages 539-556, April.
    17. Alan Berger & Case Brown & Carolyn Kousky & Richard Zeckhauser, 2011. "The Challenge of Degraded Environments: How Common Biases Impair Effective Policy," Risk Analysis, John Wiley & Sons, vol. 31(9), pages 1423-1433, September.
    18. Yamamura, Eiji, 2012. "Experience of technological and natural disasters and their impact on the perceived risk of nuclear accidents after the Fukushima nuclear disaster in Japan 2011: A cross-country analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 360-363.
    19. Tibor Besedeš & Cary Deck & Sudipta Sarangi & Mikhael Shor, 2012. "Age Effects and Heuristics in Decision Making," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 580-595, May.
    20. Hasson, Reviva & Löfgren, Åsa & Visser, Martine, 2010. "Climate change in a public goods game: Investment decision in mitigation versus adaptation," Ecological Economics, Elsevier, vol. 70(2), pages 331-338, December.

    More about this item


    data breach; credit; Equifax;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • G50 - Financial Economics - - Household Finance - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedkrw:94989. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lu Dayrit (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.