As an economics
student, I am keenly interested in what factors are most important in driving
economic growth. As a result, I recently became interested in studying the
economics of technology and innovation and, in particular, how regulatory
policy can interfere with entrepreneurial activity and constrain growth. I
believe that it is important, when crafting policy, to recognize that good
intentions do not guarantee good outcomes and to use data to analyze potential
unintended consequences.
This research project
was originally the brain child of my research mentor, David Lucas, an economics
Ph.D. student at George Mason University. Our project aims to identify the
economic effects of digital privacy regulations. Specifically, we are looking
at the Children’s Online Privacy Protection Act (COPPA), and trying to determine
how recent rule changes from the Federal Trade Commission will affect
entrepreneurs and firms that work in the digital space.
We are looking at data
on U.S. businesses, both employment and total number of firms. -By breaking the
data down into industry sectors, we are using a difference-in-difference
approach to attempt to isolate the effect that the recent changes in COPPA
rules have had on employment and firms entering the market. We will also
attempt to compile similar data on businesses in countries with similar
economies, in order to compare with the U.S. We suspect that the increased
compliance costs associated with the stricter COPPA rules are raising the
barriers to entry for entrepreneurs and making it more difficult for small
firms to compete. By the time we are done with this project, we hope to analyze
the literature on the economics of privacy and the effects of regulatory
compliance, and to contribute to this work by analyzing the economic effect of
COPPA regulations.