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The Determinants of Music Piracy in a Sample of College Students

40 Pages Posted: 4 Oct 2009 Last revised: 20 May 2010

Marc F. Bellemare

University of Minnesota - Twin Cities - Department of Applied Economics

Andrew M. Holmberg

US Department of Justice

Multiple version iconThere are 2 versions of this paper

Date Written: May 20, 2010

Abstract

Why do some individuals pirate digital music while others pay for it? Using data on a sample of undergraduate students, we study the determinants of music piracy by looking at whether a respondent’s last song was obtained illegally or not. In doing so, we incorporate (i) the individual-specific transactions costs that constitute the effective price of illegal music; and (ii) individual willingness to pay (WTP) for digital music, which we elicit using a simple field experiment and which we use to control for the unobserved heterogeneity of preferences between respondents. Our empirical results indicate that a respondent’s subjective probability of facing a lawsuit and her degree of morality both have a negative impact on the likelihood that her last song was obtained illegally. These results are robust whether WTP is estimated parametrically or nonparametrically. We conclude by discussing the practical implications of our findings.

Keywords: Music Piracy, Transactions Costs, Subjective Expectations

JEL Classification: D12, K11, K42, Z11

Suggested Citation

Bellemare, Marc F. and Holmberg, Andrew M., The Determinants of Music Piracy in a Sample of College Students (May 20, 2010). Available at SSRN: https://ssrn.com/abstract=1481272 or http://dx.doi.org/10.2139/ssrn.1481272

Marc F. Bellemare (Contact Author)

University of Minnesota - Twin Cities - Department of Applied Economics ( email )

MN
United States

Andrew M. Holmberg

US Department of Justice ( email )

950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
United States

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