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another study: RIAA is full of $hit

A new study in the Journal of Political Economy by Felix Oberholzer-Gee and Koleman Strumpf has found that illegal music downloads have had no noticeable effects on the sale of music, contrary to the claims of the recording industry.

Entitled "The Effect of File Sharing on Record Sales: An Empirical Analysis," the study matched an extensive sample of music downloads to American music sales data in order to search for causality between illicit downloading and album sales. Analyzing data from the final four months of 2002, the researchers estimated that P2P affected no more than 0.7% of sales in that timeframe.

The study looked at time periods when German students were on holiday after demonstrating that P2P use increases at these times. German users collectively are the #2 P2P suppliers, providing "about one out of every six U.S. downloads," according to the study. Yet the effects on American sales were not large enough to be statistically significant. Using this and several other methods, the study's authors could find no meaningful causality. The availability and even increased downloads of music on P2P networks did not correlate to a negative effect on music sales.

"Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample," the study reports. "Even our most negative point estimate implies that a one-standard-deviation increase in file sharing reduces an album's weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero."

posted by JWL at 10:14 AM |