The Identity Theft Sector

I just heard on the radio two claims about identity theft. First, ten million people a year in the U.S. were victims of some form of identity theft last year. Second, the average loss before the theft was discovered was $93,000.

These two statements cannot both be true without some serious equivocation. Multiplying $93,000 by ten million gives $930 billion. Since the entire U.S. GDP is only around $11 trillion, this would make the identity theft sector one of the most important pieces of the entire economy. $930 billion is reasonably close to the amount of business that the entire construction sector does in a year — and it employs a lot more people than the identity theft sector does.

My guess is that these two statistics weren’t referring to the same population: that $93,000 figure must be calculated across a much smaller population than th whole ten million affected in some way by identity theft. But the radio announcer wasn’t drawing any such distinctions. The basic implausibility of the facts he was reciting ought to have raised alarm bells; it speaks poorly of American numeracy that they didn’t.