Widdows and McHugh (1984)

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1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Source Details

Widdows and McHugh (1984)
Title: Taxing Purchases of Home Tape Recorders and Supplies to Compensate for Copyright Infringements: An Econometric Analysis of the Role of Economic and Demographic Factors
Author(s): Widdows, R., McHugh, R.J.
Year: 1984
Citation: Widdows, R., & McHugh, R. J. (1984). Taxing purchases of home tape recorders and supplies to compensate for copyright infringements: An econometric analysis of the role of economic and demographic factors. Journal of Consumer Affairs, 18(2), 317-325.
Link(s): Definitive ,
Key Related Studies:
Discipline:
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About the Data
Data Description: The data for total prerecorded music sales were obtained from RIAA press releases. Employment data are from the Bureau of Labor Statistics; income and price data are from the Bureau of

Economic Analysis Survey of Current Business.

Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: No
Comparative Study?: No
Literature review?: No
Government or policy study?: No
Time Period(s) of Collection:
  • 1977-1978
Funder(s):
  • The American Council on Consumer Interests

Abstract

Faced with a sharp decline in sales in the early 1980’s, the music industry looked for an explanation which could be converted into windfall gains for itself. The explanation proposed by the industry was increased home taping of pre-recorded music. Through the introduction of federal legislation, the industry hoped to realize gains at the expense of the consumer of home taping equipment and media. The analysis presented here indicates that the independent effect of taping on pre-recorded music sales may not have been as high as the recording industry has claimed, so that consumers may end up paying more than their fair share toward the windfall.

Main Results of the Study

It is still possible that a surcharge will be placed on sales of home taping equipment and media, as a follow-on from the aforementioned Mathias Amendment. In effect this would represent a royalty tax placed on consumers. It will be justified by reference to artist and producer copyrights over prerecorded work. While there is some merit in the argument put forth by the owners of copyrights, our worry is that the amount of the surcharge may be derived from crosssectional studies which do not assess the independent impact of economic and demographic change on sales. Our attempt to control for economic and demographic effects on sales of pre-recorded music in recent years through a dynamic economic model indicates that the independent effect of economic and demographic change is much greater than legislators have been led to believe.

Policy Implications as Stated By Author

At the very least, this finding suggests that much more econometric analysis needs to be done before a “tax” is approved which would transfer millions of dollars from consumers to the recording industry.


Coverage of Study

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Green-tick.png
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Green-tick.png
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

Datasets

Sample size: 1
Level of aggregation: Total yearly sales of prerecorded music
Period of material under study: 1977-78


Sample size: 1
Level of aggregation: Average individual income level
Period of material under study: 1977-78


Sample size: 1
Level of aggregation: Yearly unemployment rate
Period of material under study: 1977-78