IP Outreach Research > IP Crime
Reference
| Title: | Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students |
| Author: | Rafael Rob and Joel Waldfogel [University of Pennsylvania] |
| Source: | Journal of Law and Economics 49, no. 1: 29-62 |
| Year: | 2006 |
Details
| Subject/Type: | Piracy |
| Focus: | Music |
| Country/Territory: | United States of America |
| Objective: | To examine the effect of downloading on music sales and on welfare. |
| Sample: | 412 College students |
| Methodology: | Surveys |
Main Findings
The study found evidence that music downloading affects music sales, albeit sales displacement is incomplete: a music album download reduces sales by roughly 0.2 units, i.e. every 10 downloads result in 1-2 lost sales. Downloading reduces music purchases by about 10%. Average per capita expenditure on hit albums decreases from $126 to $101 with downloading.
Generally, downloaded music is valued much less than purchased music (from a third to a half less), lending credence to the finding of incomplete sales displacement: at least some of the music that is downloaded would not have otherwise been purchased.
While downloading reduces consumer expenditure by $25 (producer surplus: -$25), it raises consumer welfare by $70 per capita. The net benefit ($45 per capita) comes from reductions in deadweight loss.
[Date Added: Oct 22, 2008 ]