Chiang and Assane (2009)
|Chiang and Assane (2009)|
|Title:||Estimating the willingness to pay for digital music|
|Author(s):||Chiang, E. P., Assane, D.|
|Citation:||Chiang, E. P., & Assane, D. (2009). Estimating the willingness to pay for digital music. Contemporary Economic Policy, 27(4), 512-522.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||Confidential, anonymous written survey of 665 college students from two major U.S. universities, with 472 sufficiently complete for empirical inclusion (51% male, 49% female). The median age was 21 and included students from all university levels and majors. Respondents were 52% White; 14% Asian; 38% all other ethnicities combined. 14% of the students lived on campus, and 71% worked at least part time.|
|Data Type:||Primary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
The general consensus among the copyright piracy literature is that economic incentives and enforcement are both effective strategies that complement one another in reducing the occurrence of piracy. Yet, the key factor underlying these strategies is the ability of the media industries to influence an individual’s willingness to pay (WTP) for legal purchases when illegal versions exist. This article estimates the effects of factors influencing WTP for digital music downloads. Our results show that while income and risk perceptions play a dominant role in determining WTP, ethics are also important in influencing WTP. Our results are consistent with the growing consumer acceptance of fee-based music services that can exist alongside peer-to-peer file sharing as well as serve as a viable substitute.
Main Results of the Study
This article contributes to the ongoing debate by studying the factors influencing willingness to pay (WTP) and its role in reducing the extent of copyright piracy. It argues that:
- Income and risk perceptions play a dominant role in influencing WTP. It also finds that ethics strongly and positively influence WTP, which is consistent with the growing acceptance of fee-based music (e.g., iTunes).
- The key variables INCOME (economic factor) and CAUGHT and PENALTY (risk factors) contribute significantly and positively to influencing students’ WTP for digital music downloads.
- Male students are significantly less likely to be willing to pay for music relative to female students.
- Older students are significantly more willing to pay for music, a finding that may reflect a growing maturity level as students complete their studies.
- White/Caucasian and Asian/Asian- American students are more likely to acquire music using piracy methods, with the former exhibiting a stronger tendency.
- Aside from the key income and risk variables, ethical considerations also are a contributing factor in a student’s decision to purchase music rather than using file-sharing methods or forgoing consumption.
Policy Implications as Stated By Author
- Reducing piracy entails reducing the net value of participating in the illegal market or increasing the net value of participating in the legal market, or both. Economic incentives and enforcement actions both contribute to such outcomes though it is unclear to what extent such strategies influence the willingness of individuals to pay for goods in the legal market.
- Government policies and corporate strategies aimed at increasing the value of legal music downloads (by lowering prices or increasing their perceived value) and increasing perceived risk of piracy (by making illegal downloads less attractive) can have a complementary and significant impact on reducing music piracy.
- Campaigns to increase awareness of the potential harmful effects of all forms of copyright piracy are shown to be effective in influencing the decisions of students when choosing the means to acquire music.
Coverage of Study
|Level of aggregation:||University students|
|Period of material under study:||2003-2004|