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  • Steven Lee

It Begins...

Updated: Mar 6, 2019

Last year, my dissertation chair, Dr. Benjamin Cummings, called to ask if I would assist him in a project on affinity fraud. That's the fancy name for fraudulent investment schemes that happen to members of an "in" group, whether it be a church, a work association, or even an ethnic community. As we looked through the literature on affinity fraud, cognitive and affective trust, we discovered that we needed to see what was going on with victims of these scams.


We used a large secondary data set called the Health and Retirement Study (HRS), a longitudinal survey of Americans 50 years of age or older. We looked for identifying characteristics among victims who answered affirmatively to the 2008 HRS question, "Have you been a victim of fraud any time in the past five years?" In our initial analysis, we found that gender, education, age, and marital status were all statistically significant. Yet, the particular direction of those findings (among other things) were--and still are--quite puzzling.


First, our findings suggest that males are more likely than females to report fraud--19.2% more likely in fact. Also, higher levels of education means greater likelihood to report fraud. In addition, those in their 50s and 60s are more likely to report. Lastly, those who are single are more likely to admit having been defrauded.


In misconduct research (and fraud even more so), there is a persistent concern of under-reporting. This is the case with financial elder abuse as well. When we say that someone is more or less likely "to report having been a victim of fraud," does that mean that person actually was defrauded? Good question. The HRS data doesn't make that distinction, and many studies across disciplines share that same problem. Another way to word this, as my since retired statistics professor in my doctoral program used to ask during dissertation defenses, "How do you know your respondents are telling you the truth?"


I'm a Puritan when it comes to academic research. I wonder if this will still be the case 10 or 20 years from now. I will endeavor to focus this attitude on my own work. I have a fraud research call in the morning with my co-editors. We will decide whether the paper is worthy of submitting to a journal or if further revision is needed.



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