I was very fortunate to receive a Sandell Grant from the Center for Retirement Research at Boston College. The grant supports my new research into the causes and consequences of financial fraud among older Americans. Financial fraud is a major threat to the retirement security of senior citizens, and its prevalence is growing. Despite this problem, few studies have examined the factors that make an older person susceptible to financial fraud. The impact of being a victim of financial fraud on future decision making is also under-examined. The proposed research will address these gaps in knowledge about the causes and consequences of financial fraud victimization among older Americans.
Perhaps the most significant barrier to research in this area is getting the data required for a systematic study. Victims may never report the crime to the authorities, and known victims may not want to share their experience. I have found a unique opportunity to study financial fraud through Rush University Medical Center’s Memory and Aging Project (MAP), an ongoing study of aging. Since its beginning in 1997, MAP has enrolled participants age 60 and older from throughout the Chicago metropolitan area in its study. Participants undergo yearly interviews and clinical evaluations. Since 2010, MAP has administered a survey of financial decision making, which includes questions addressing financial fraud victimization. About 10% of participants report being recently victimized by financial fraud. The MAP decision-making survey has generated a large dataset from victims and non-victims of fraud. I will use the MAP dataset to test hypotheses about what makes a person susceptible to financial fraud and what impact fraud victimization has on one's future financial decision making.
I (an economist) am partnered with three researchers from Rush University Medical Center: Patricia A. Boyle, a psychologist; Lei Yu, a statistician; and David A. Bennett, a neurologist. Collectively the research team has the required expertise to conduct this multidisciplinary study. This research team has already produced a published research article using MAP data, and it has one current working paper, with me as first author, using MAP data that identifies overconfidence in one's financial knowledge as a significant risk factor for financial fraud victimization among older Americans. The proposed research builds on this established relationship and advances the research agenda of the collaboration as well as the research agenda of the Center for Retirement Research at Boston College.