Dead Poets’ Property - How Does Copyright Influence Price?

Abstract

Copyrights create long-lived intellectual property in goods ranging from science, literature, and music to news, film and software. The economic effects of copyright, however, are difficult to identify in modern settings. This article exploits an unintended differential increase in copyright length under the UK Copyright Act of 1814 – in favor of books by dead authors – to examine the effects of longer copyright terms on price. We find that a doubling in copyright length was associated with a substantial (roughly 50 percent) increase in the price of books. Additional years of copyright improved publishers’ ability to practice intertemporal price discrimination.

Keywords: copyright, creativity, innovation, media, price discrimination.

JEL Classification: O3, K00, N33