Article in ssrn electronic Journal · July 015 doi: 10. 2139/ssrn. 2634590 citations 32 reads 1,108 author: Some of the authors of this publication are also working on these related projects

Figure 12: Average Detection and Escalation Costs
0 
50000 
100000 
150000 
200000 
250000 
300000 
350000 
400000 
450000 
500000 
0 
50 
100 
150 
200 
250 
300 
350 
2008 
2009 
2010 
2011 
2012 
2013 
Cost per 1,000,000,000 US Dollars 
Average Detection and Escalation Cost 
Average Detection and Escalation Cost per 1,000,000,000 Dollars (McKinsey) 
Average Detection and Escalation Cost per 1,000,000,000 Dollars (Boston Consulting Group) 
Figure 13 presents data on the absolute and normalized 
trends in post-breach response costs. At first blush, both 
the absolute and the normalized numbers paint a roughly 
consistent picture. A more in-depth comparison reveals two 
points that suggest the absolute numbers overrepresent the 
post-breach response costs of cybercrime. First, the absolute 
numbers indicate an escalatory trend in costs, as shown 
by the long-dashed trend line. In contrast, the numbers 
normalized around the Boston Consulting Group estimates 
for the Internet’s contribution to the global economy 
shows a de-escalatory or declining trend, as shown by the 
solid black trend line (the McKinsey & Company numbers 
also point to a declining trend). Secondly, the rate at which 
the post-breach costs have declined since the high-water 
mark of 2010 into 2013 shows a greater decline for the 
normalized numbers compared to the absolute numbers. 
In particular, the absolute costs fell from $1,738,761 in 
2010 to $1,599,996 in 2013 or a decrease of 7.98 percentage 
points. In comparison, the numbers normalized around 
the Boston Consulting Group’s estimates show a decline 
from $828.44 per $1,000,000,000 in 2010 to $653.73 per 
$1,000,000,000 in 2013, which amounts to a decrease of
21.1 percent. With respect to the post-breach response 
costs, the absolute numbers point to both a worsening 
situation and a slower rate of potential improvement, 
while the normalized numbers point toward a generally 
improving situation and a larger decrease since the highest 
level of costs in the sample.