The impact of the online marketplace on fraud: Evidence from Craigslist from its early adoption in 1995 to its wider expansion in 2006

Abstract

This research addresses the influence of Craigslist’s adoption and presence on fraud arrests within metropolitan statistical areas (MSAs). Utilizing the consumer vulnerability framework (Hill & Sharma, 2020), the study used diverse data sources, including Craigslist entry data, the Uniform Crime Reporting (UCR) dataset, and the US Census Bureau Current Population Survey (CPS) data from 1995-2006. Employing differences-in-differences (DID) models, this study's primary findings indicate a reduction in fraud arrests, ranging from 11% to 23% following the introduction of Craigslist. While these results might appear counterintuitive, our findings suggest that online marketplace design and enforcement capacity may jointly influence fraud patterns.