Li, MacGarvie and Moser (2018)
|Li, MacGarvie and Moser (2018)|
|Title:||Dead poets' property—how does copyright influence price?|
|Author(s):||Xing Li, Megan MacGarvie, Petra Moser|
|Citation:||Li, X., MacGarvie, M. And Moser, P. (2018) Dead poets' property—how does copyright influence price? The RAND Journal of Economics, 49(1)|
|Key Related Studies:|
|About the Data|
|Data Description:||The data consists of the prices of 1,227 new book editions between 1790 and 1840 in Britain. Variables were also gathered in relation to the age of the book, number of volumes, genre, and other factors (such as length and size). Each book was then split into groups depending on whether their respective author was dead or alive.|
|Data Type:||Primary and Secondary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:||
“Copyrights create long‐lived intellectual property in goods ranging from science, literature, and music to news, film, and software. The economic effects of copyright, however, are difficult to identify in modern settings. This article exploits an unintended differential increase in copyright length under the UK Copyright Act of 1814—in favor of books by dead authors—to examine the effects of longer copyright terms on price. We find that a doubling in copyright length was associated with a substantial (roughly 50%) increase in the price of books. Additional years of copyright improved publishers' ability to practice intertemporal price discrimination.”
Main Results of the Study
Where copyright duration is extended, this increases the price of creative works in particular for dead authors. Following the extension of copyright granted under the UK Copyright Act of 1814, the price of living authors works remained consistent, whereas the price of dead authors works rose from 20.50 shillings to 28.01 shillings (a weekly wage at the time being approx. 9 shillings).
Such a price increase is attributed to publishers ability to initiate intertemporal price discrimination as a result of the increase in copyright duration. This was achieved by:
• Offering new editions to wealthy libraries at higher prices, and reduced prices for smaller libraries and individual buyers. At this time, even wealthy buyers would wait until the price of a work was reduced before purchase.
• Creating multiple volumes out of previously single-volume work so as to maximise returns. Before 1814, 55% of dead authors’s books were multi-volume, and after this rose to 89%, thus creating multiple payments.
• Reducing the price of works as they reach the end of their copyright. This is based on a consumers willingness to pay being high at the initial point of publishing and reducing as time goes on (lowering the price by approx. 10.46 shillings towards the end of copyright duration).
Policy Implications as Stated By Author
Whilst the study does not make any explicit policy recommendations, it does note that the increase in the price of works caused by increasing copyright duration may inadvertently increase access issues to existing works (in turn depressing the creation of new works). In particular, this may impact fields in research and science. The authors note that the 19th century publishing industry shares parallels with the publishing industry today, including the lack of a second-hand market in books; as such, they propose that this analysis may be applied to modern day questions of copyright duration.