How One Unverified Claim Of A $7,500 'Loss' From Cybercrime Translates To $1.5 Billion In Losses In The Press

from the lies,-damned-lies dept

I think we should just admit that there's a "cyber-" inflation factor. That is, for anything in which someone puts a prefix of "cyber-" before a word, we can assume that reports of the "impact" are going to be massively inflated. Cyberwar? Totally overhyped. Cyberbullying? Not nearly as crazy as you hear. And now we've got a new report saying that reports of "losses" from "cybercrime" appears to be greatly overestimated as well.
First, losses are extremely concentrated, so that representative sampling of the population does not give representative sampling of the losses. Second, losses are based on unverified self-reported numbers. Not only is it possible for a single outlier to distort the result, we find evidence that most surveys are dominated by a minority of responses in the upper tail (i.e., a majority of the estimate is coming from as few as one or two responses). Finally, the fact that losses are confined to a small segment of the population magnifies the difficulties of refusal rate and small sample sizes. Far from being broadly-based estimates of losses across the population, the cyber-crime estimates that we have appear to be largely the answers of a handful of people extrapolated to the whole population. A single individual who claims $50,000 losses, in an N = 1000 person survey, is all it takes to generate a $10 billion loss over the population. One unverified claim of $7,500 in phishing losses translates into $1.5 billion
And yet, of course, such claims of massive losses will still be regularly repeated in the press and by politicians. I've always said that it would be great if we could force feed politicians and journalists economics lessons, but I'd like to propose adding statistics to the required curriculum as well.


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    Anonymous Coward, Aug 11th, 2011 @ 10:30am

    No surprise here. Masnick is fine with people stealing art that doesn't belong to them. Is it really so shocking he would defend phishers and the like too?

     

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      Anonymous Coward, Aug 11th, 2011 @ 10:51am

      Re:

      So fitting that you would choose this post to "STRETCH" the actual point behind it.

       

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      Anonymous Coward, Aug 11th, 2011 @ 10:54am

      Re:

      Pirates and fishing...somehow it makes sense.

       

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      Anonymous Coward, Aug 11th, 2011 @ 11:08am

      Re:

      I don't know why people get mad in response to your posts. You are nothing short of a genius to be able to come up with this stuff!

       

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        Anonymous Coward, Aug 11th, 2011 @ 11:21am

        Re: Re:

        Thanks. I'm not one of the usual; this is actually my first time trolling techdirt.

         

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          Sum One, Aug 11th, 2011 @ 12:24pm

          Re: Re: Re:

          Really? You sound like a seasoned Techdirt trolling pro! I'd hazard a guess that you're either a copyright lawyer or entertainment exec, am I right? You'll fit right in here with the other corrupt deniers, fibbers, and outright greedy liars then. Welcome to Techdirt!

           

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          Brendan (profile), Aug 11th, 2011 @ 3:54pm

          Re: Re: Re:

          Welcome aboard the USS Pantomime.

           

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          identicon
          Anonymous Coward, Aug 11th, 2011 @ 4:43pm

          Re: Re: Re:

          I'm glad to see that it is contagious.

          A couple of friendly tips -

          1. Reply to the dumbest people, but don't worry about the ones with good points. If their whole point boils down to 'I know you are but what am I?' then thrash them handily without touching the guys that have well reasoned arguments.

          2. Use the word FREETARD. People get all up in arms when you use that word. No matter what your point is, using that word is guaranteed to elicit a few nerd rage responses.

          Happy trolling!

           

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    Vic, Aug 11th, 2011 @ 10:35am

    That just so asks for a quote popularized by Mark Twain about lies, damn lies, and (add your cyber here) statistics. 8^)

     

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    ChurchHatesTucker (profile), Aug 11th, 2011 @ 10:36am

    Stats?

    Isn't How to Lie with Statistics (or the equivalent) required reading in journalism schools? It should be.

     

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    Ninja (profile), Aug 11th, 2011 @ 10:54am

    Well, that's statistics at work. You can always torture the numbers to tell you exactly what you want to hear. And it never fails ;)

    That's why I never believe whatever claims unless I see how it was sampled, what statistic methods were applied, how much of an err was admitted (confidence interval and the likes) and so on. Unfortunately, I'm the minority that has at least a tiny bit of knowledge about statistics. (No statistics used here but empirically almost no1 around me has any clue how to deal with statistic data or judge if a statistic study has been conducted in a proper manner).

     

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    Atkray (profile), Aug 11th, 2011 @ 11:04am

    Requiring journalists and politicians to learn statistics would accomplish two desirable goals:

    1: The members of these groups would be better positioned to do their respective jobs.

    2: The number of people in each group would be drastically reduced.

     

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    Rich Kulawiec, Aug 11th, 2011 @ 11:10am

    This is why anyone running for an elected office...

    ...should be required to pass an examination in mathematics, including geometry, trigonometry, algebra, basic calculus and statistics. We certainly would not (and should not) allow someone who is illiterate in the relevant language(s) to hold office; neither should we permit anyone who's mathematically illiterate to do so.

    (Yes, I'm well aware that this is not a panacea, but wouldn't it be nice to actually have a senator who could multiply? Or a DA who knew what the bell curve is? And how refreshing would it be to have ANY elected official who understood the proper way to extrapolate an exponential?

    "The greatest shortcoming of the human race is man's inability to understand the exponential function."--- Albert A. Bartlett

     

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    specialized (profile), Aug 11th, 2011 @ 11:46am

    Politicans and the like already know how to use statistics -- or rather how to twist numbers to conform with their talking points. Really the average citizen should be given statistics lessons, so that they can all see through the bullshit and lies.

     

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    out_of_the_blue, Aug 11th, 2011 @ 12:28pm

    Neither economics nor statistics are hard sciences.

    So one is free to make up any interpretation, or any slant, as it can never be objectively nailed down.

    Therefore, your "forced feeding" seems similar to commie "re-education": you just intend to stifle other /views/ not /facts/.

    By the way, Marx was an economist.

     

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      Anonymous Coward, Aug 11th, 2011 @ 1:03pm

      Re: Neither economics nor statistics are hard sciences.

      Neither economics nor statistics are hard sciences.

      Talk about making stuff up. Statistics is a field of mathematics. I suppose you've never studied it? Of course, I can see how when someone doesn't like how the numbers add up they might in response just want to just declare mathematics to be unscientific. What a load.

       

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    Michael (profile), Aug 11th, 2011 @ 2:31pm

    Someone call the Power Rangers. We need professional help fighting these Virtual Reality monsters!

     

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    Ken Magill, Aug 12th, 2011 @ 9:33am

    This isn't a statistics issue

    It's a common sense issue. And too many politicians and reporters lack it.

     

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