Dead Poets' Property: The U.K. Copyright Act of 1814 and the Price of Intellectual Assets

Abstract:     
Although the optimal strength of copyright is a subject of intense debate, there is little empirical evidence on causal effects of stronger copyright terms. To address this issue, this paper exploits a differential increase in the length of copyright under the 1814 U.K. Copyright Act - in favor of books by dead authors - to measure the effects of longer copyright terms on the price of books. Difference-in-differences analyses, which compare the price of books by dead and living authors before and after 1814, indicate an 8 percent increase in price for each additional year of copyright, controlling for book age, author, and time fixed effects. Results are robust to controlling for literary quality, genres, and physical characteristics of books, as well as to excluding books by famous or recently deceased authors. Placebo regressions for books by dead authors that did not benefit from stronger copyrights yield no evidence for a differential increase in price after 1814. Our evidence suggests that longer copyright terms increased the price of books by allowing publishers to practice inter-temporal price discrimination, consistent with the Coase conjecture, because consumers who were willing to wait for lower-priced editions were less likely to wait for the extended term. Complementary analyses, which exploit variation in remaining years of copyright, indicate that prices fall as books approach the end of copyright.

Number of Pages in PDF File: 46

Keywords: copyright, intellectual property, literature, books, media, economic history, Britain

JEL Classification: O34, N0, L4, L51, L12, L82

working papers series