Economists Examine File-Sharing and Music Sales

The decline in sales of music CDs and the recording industry’s attempts to reverse the decline have been much in the news over the last few years. Since this decline began at the same time that file-sharing became popular, and since file-sharing would be expected to lead to a decline in sales, file-sharing is the leading candidate among possible causes of this decline. At the center of the file-sharing debate is the empirical issue of whether or not file-sharing decreases sales. In this paper I examine the different empirical methodologies that have been chosen by economists studying this issue. The studies use different methodologies but nevertheless find, almost unanimously, that file- sharing has led to a serious decline in record sales, except for one highly publicized study that reaches very different, and in my opinion, highly implausible conclusions.mp3, filesharing, music, downloading, napster

SEVENTEEN FAMOUS ECONOMISTS WEIGH IN ON COPYRIGHT: THE ROLE OF THEORY, EMPIRICS, AND NETWORK EFFECTS

In 2002, seventeen economists including five Nobel Laureates presented an amicus curiae brief discussing the economics of copyright extension in support of the petitioners in Eldred v. Ashcroft. The economists’ amicus brief was unusual in several respects, not least in that it brought together a group of economists almost as notable for its diversity of opinion (spanning the ideological spectrum from Kenneth Arrow to Milton Friedman) as for its academic distinction. When such a distinguished and broad panel of economists readers would have every reason to believe that the arguments set forth in this document are sound down to the smallest details. Yet this is not the case. Scholars in the fields of law and economics will continue to address the economics of copyright duration in the foreseeable future, so it is important that they understand the imperfections in the economists’ brief. This Article provides a counterweight to the amicus brief, identifying some points the economists ignored, clarifying some discussions they did not quite get right, and providing data that runs counter to some assumptions they made.Eldred, coypright, sonny bono, lessig

File Sharing: Creative Destruction or Just Plain Destruction?

The sharing of sound recordings over the Internet is the newest controversy in a long-running battle between copyright owners and copying technologies. In order to provide some context, perspective, and background, this paper examines the short history of file sharing, the longer history of record sales, various explanations for the change in record sales, and some analysis of the economics of copying. Although file sharing has been imperfectly and inconsistently measured, it nevertheless appears to reveal a fairly close linkage between changes in file sharing and changes in record sales. Explanations, other than file sharing, for the recent decline in record sales seem to have little or no support. Because economic theories of the impacts of copying hold out little hope for a benign impact of file sharing, these results should not be surprising. These findings reinforce the econometric results from most of an expanding literature. I