Of particular note is an exploration by Rafael Rob and Joel Waldfogel (University of Pennsylvania) of the sales displacement induced by downloading, incorporating consumer valuation in dollar terms of purchased albums vs. downloaded music. In a sample of college students at four U.S. colleges, the researchers found that downloading reduces per capita expenditures by $25, but increases the amount of music each individual consumes by the equivalent of $70. Thus, among their sample group, $45 worth of music – three albums – would have otherwise been forgone.
"While perhaps paradoxical to the law-abiding citizen, illegal downloading may actually alleviate the monopoly deadweight-loss problem" write Rob and Waldfogel. "Indeed, downloading allows consumers to engage in a crude "do-it-yourself" form of price discrimination."
Articles:
Stan L. Liebowitz "File Sharing: Creative Destruction or Just Plain Destruction?"
Rafael Rob and Joel Waldfogel "Piracy on the High C's: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students"
Alejandro Zentner "Measuring the Effect of File Sharing on Music Purchases"
Sudip Bhattacharjee, et al. "Impact of Legal Threats on Online Music Sharing Activity: An Analysis of Music Industry Legal Actions"
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