TY  - JOUR
AU  - Rob,Rafael
AU  - Waldfogel,Joel
TI  - Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10874
PY  - 2004
Y2  - November 2004
UR  - http://www.nber.org/papers/w10874
L1  - http://www.nber.org/papers/w10874.pdf
N1  - Author contact info:
Joel Waldfogel
Frederick R. Kappel Chair in Applied Economics
3-177 Carlson School of Management
University of Minnesota
321 19th Avenue South
Minneapolis, MN 55455
Tel: 612/626-7128
E-Mail: jwaldfog@umn.edu
AB  - 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.
ER  -