Piracy on the High C'S: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students

50 Pages Posted: 29 Oct 2004 Last revised: 19 Sep 2010

See all articles by Rafael Rob

Rafael Rob

University of Pennsylvania - Department of Economics

Joel Waldfogel

University of Minnesota - Twin Cities - Carlson School of Management; National Bureau of Economic Research (NBER); University of Minnesota - Twin Cities - Department of Economics

Date Written: November 2004

Abstract

Recording industry revenue has fallen sharply in the last three years, and some -- but not all -- observers attribute this to file sharing. We collect new data on albums obtained via purchase and downloading, as well as the consumers' valuations of these albums, among a sample of US college students in 2003. We provide new estimates of sales displacement induced by downloading using both OLS and an instrumental variables approach using access to broadband as a source of exogenous variation in downloading. Each album download reduces purchases by about 0.2 in our sample, although possibly much more. Our valuation data allow us to measure the effects of downloading on welfare as well as expenditure in a subsample of Penn undergraduates, and we find that downloading reduces their per capita expenditure (on hit albums released 1999-2003) from $126 to $100 but raises per capita consumer welfare by $70.

Suggested Citation

Rob, Rafael and Waldfogel, Joel, Piracy on the High C'S: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students (November 2004). NBER Working Paper No. w10874, Available at SSRN: https://ssrn.com/abstract=612076

Rafael Rob

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-6775 (Phone)
215-573-2057 (Fax)

Joel Waldfogel (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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

271 19th Avenue South
Minneapolis, MN 55455
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
193
Abstract Views
5,070
rank
170,457
PlumX Metrics