December 2016
Article
Information Economics and Policy

The Effect of File Sharing on Record Sales, Revisited

By: Felix Oberholzer-Gee and Koleman Strumpf

Format:Print

Abstract

Even as we approach the twentieth anniversary of widespread file sharing, its impact on the sale of copyrighted material remains in dispute. We contributed to this debate with an early study, “The Effect of File Sharing on Record Sales: An Empirical Analysis,” that was published in the Journal of Political Economy in 2007. Perhaps surprisingly, we found that piracy contributed to the decline in music sales but was not the main cause. In this article, we review and respond to recent criticism of our work by Stan Liebowitz in Econ Journal Watch. We show how the use of proxies for file sharing can result in misleading conclusions. We close by reviewing what we know about the impact of file sharing on record sales today. In our view, new music formats are an important if understudied channel through which changes in technology influence the demand for entertainment.

Keywords

Crime and Corruption; Copyright; Sales; Retail Industry; Music Industry

Citation

Oberholzer-Gee, Felix, and Koleman Strumpf. "The Effect of File Sharing on Record Sales, Revisited." Information Economics and Policy 37 (December 2016): 61–66.