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.