Bellemare and Holmberg (2010)
|Bellemare and Holmberg (2010)|
|Title:||The determinants of music piracy in a sample of college students|
|Author(s):||Bellemare, M., Holmberg, A.|
|Citation:||Bellemare, M. F., & Holmberg, A. M. (2010). The determinants of music piracy in a sample of college students. Available at SSRN 1481272.|
|Link(s):||Definitive , Open Access|
|Key Related Studies:|
|About the Data|
|Data Description:||The data used in this paper were collected using a web-based survey that we developed. On March 3, 2009, the survey was sent to the entire undergraduate student body (i.e., over 6,000 students) of a Southern private research university through the undergraduate email distribution list.The raw data set comprised 309 observations.|
|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:||
Why do some individuals pirate digital music while others pay for it? Using data on a sample of undergraduate students, we study the determinants of music piracy by looking at whether a respondent’s last song was obtained illegally or not. In doing so, we incorporate (i) the individual-specific transactions costs that constitute the effective price of illegal music; and (ii) individual willingness to pay (WTP) for digital music, which we elicit using a simple field experiment and which we use to control for the unobserved heterogeneity of preferences between respondents. Our empirical results indicate that a respondent’s subjective probability of facing a lawsuit and her degree of morality both have a negative impact on the likelihood that her last song was obtained illegally. These results are robust whether WTP is estimated parametrically or nonparametrically. We conclude by discussing the practical implications of our findings.
Main Results of the Study
- WTP for music only has a significant negative effect on music piracy insofar as controls for parental income are omitted. In other words, one’s WTP for music is driven largely by one’s full income, which includes parental income for the college students considered in this paper.
- Transactions costs significantly affect the decision to pirate music.
- Respondents who had recently received an iTunes gift card were 15 percent less likely to have pirated their last song, and the lower the annual income of a respondent’s parents, the more likely she was to have pirated her last song
Policy Implications as Stated By Author
These findings point to an important policy recommendation. If the goal of the RIAA was solely to deter piracy, it should not have abandoned its policy of suing the people it caught pirating digital music. Indeed, after suing 30,000 people over five years, the RIAA announced on December 19, 2008 that it would stop suing people over digital music piracy. Our findings nevertheless indicate that the threat of legal action had a significant impact at the margin on our respondent’s decision to pirate music. Moreover, given that our sample is composed of college students, a university that wants to reduce music piracy could use our estimate of WTP for music to sign a licensing agreement with an online music retailer wherein students can download music at a subsidized price below mean estimated WTP.
Coverage of Study
|Level of aggregation:||Students|
|Period of material under study:||2009|