Gains from Digitization: Evidence from Gift-Giving in Music

44 Pages Posted: 28 Feb 2018

See all articles by Pinar Dogan

Pinar Dogan

Harvard University - Harvard Kennedy School (HKS)

Marc Bourreau

Telecom ParisTech

Date Written: February 27, 2018


In this paper, we focus on recorded music gifts during the holiday season and estimate the reduction in deadweight loss due to the transition from physical CD gift-giving to digital music gift-giving with gift cards. Based on our survey data, we find that music CD gifts generate an average deadweight loss between 15 and 38 percent of the price. According to our estimates of gift music album sales which are based on U.S. data, the welfare gains from digitization, in terms of eliminated deadweight loss as a percentage of total spending on music albums, were between 5 to 13 percent during the week when digital sales peak in 2014.

Keywords: Gift-giving, Deadweight loss, Digitization, Music

JEL Classification: D10, L82, O33

Suggested Citation

Dogan, Pinar and Bourreau, Marc, Gains from Digitization: Evidence from Gift-Giving in Music (February 27, 2018). HKS Working Paper No. RWP18-010, Available at SSRN: or

Pinar Dogan (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-6757 (Phone)
617-496-5747 (Fax)


Marc Bourreau

Telecom ParisTech ( email )

46, rue Barrault
Paris Cedex 13, F-75634

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