On the impact of digital music distribution

Illtae Ahn, Kiho Yoon

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

We present a framework to evaluate the impact of digital music distribution. We set up a representative model that enables the comparative static analysis. We then interpret two empirical observations about the music industry, the sales decline and the price constancy, and fit the model to these observations. We find that, while the impact of digitalization on the producers' profits is probably negative, it may not be as severe as the observed impact on the quantity. On the other hand, the impact of digitalization on the consumer surplus is unambiguously positive. The impact on the social welfare is rather ambiguous in general, but the social welfare may increase for plausible parameter values.

Original languageEnglish
Pages (from-to)306-325
Number of pages20
JournalCESifo Economic Studies
Volume55
Issue number2
DOIs
Publication statusPublished - 2009 Jun 15

Keywords

  • Copyright
  • Digital music
  • File sharing
  • Music industry

ASJC Scopus subject areas

  • Economics and Econometrics
  • Geography, Planning and Development

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