The effect of copyright infringement on the consumption of cultural goods
Juan D. Montoro-Pons, Manuel Cuadrado Garcia, Miguel Puchades-Navarro, Universitad de Valencia
This paper analyses the effect of copyright infringement on the consumption in the music, book and film industries in Spain. We use data by the 2010 that we have in the Survey on Habits and Cultural Practices (Spanish Ministry of Culture). We focus on the frequency of consumption and use sociocultural, demographic and economic covariates and a dummy for the copying and/or the downloading of copyright protected materials.From the existing theoretical models we do not have any a priori assumption on the sign of the latter, as both negative and positive effects are possible in this context. Negative effects stem from the substitution in consumption, while positive effects may emerge emerge as a consequence of sampling. In order to determine what hypothesis (i.e. substitution or sampling) is endorsed by the data we estimate alternative count models (statistical models that explain the frequency of participation in an activity).Preliminary empirical results support zero inflated models in all three markets considered: recorded music, films attendance and book purchases. The findings show that there are different effects on the three markets with infringement modifying the frequency of consumption and/or decreasing the likelihood of non-participation. These differences may stem to the different institutional settings in the three markets, such as the different rate of adoption or the transactions costs involved to mention two. Overall this raises interesting consequences for the analysis of the effectivity of intellectual property law and its changes.