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The price of cyber (in)security: evidence from the Italian private sector

Author

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  • Claudia Biancotti

    (Bank of Italy)

Abstract

This paper presents evidence on the economic dimension of cyber risk in the Italian private non-financial sector, based on Bank of Italy survey data. In 2016, the median amount spent on preventing cyber attacks was a modest �4,530, i.e. 15 per cent of a typical worker�s annual gross wages. A wide variation exists across sectors and size classes, reflecting differences in how appealing a target a firm is to attackers and firms� awareness of threats: median values range from �3,120 for small firms to �19,080 in the ICT sector and �44,590 for large firms. The market for cyber defence in our reference universe is worth at least �570 million. Having been attacked in the past proves to be a strong incentive to invest in security. The majority of breached firms suffered damages worth less than �10,000; 0.1 per cent reported costs of at least �200,000. Neither the sampling design nor the questionnaire were geared towards the measurement of tail events: underestimation of large incidents is likely. More information is needed before the economy-wide cost can be estimated.

Suggested Citation

  • Claudia Biancotti, 2017. "The price of cyber (in)security: evidence from the Italian private sector," Questioni di Economia e Finanza (Occasional Papers) 407, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_407_17
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2017-0407/QEF_407.pdf
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    Cited by:

    1. Toni Ahnert & Michael Brolley & David Cimon & Ryan Riordan, 2022. "Cyber Risk and Security Investment," Staff Working Papers 22-32, Bank of Canada.
    2. Cristian Roner & Claudia Di Caterina & Davide Ferrari, 2021. "Exponential Tilting for Zero-inflated Interval Regression with Applications to Cyber Security Survey Data," BEMPS - Bozen Economics & Management Paper Series BEMPS85, Faculty of Economics and Management at the Free University of Bozen.

    More about this item

    Keywords

    cyber attacks; cybersecurity; cyber risk;
    All these keywords.

    JEL classification:

    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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