nep-cul New Economics Papers
on Cultural Economics
Issue of 2016‒02‒17
three papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. Purchase, Pirate, Publicize: The Effect of File Sharing on Album Sales By Jonathan Lee
  2. Television, Cognitive Ability, and High School Completion By Hernæs, Øystein; Markussen, Simen; Røed, Knut
  3. Culture and Global Sourcing By Kukharskyy, Bohdan; Gorodnichenko, Yuriy; Roland, Gerard

  1. By: Jonathan Lee (Queen's University)
    Abstract: This paper quantifies the relationship between private-network file sharing activity and music sales in the BitTorrent era. Using a panel dataset of 2,251 albums' U.S. sales and file sharing downloads on a private network during 2008, I estimate the effect of file sharing on album sales. Exogenous shocks to file sharing capacity address the simultaneity problem. In theory, piracy could crowd out legitimate sales by building file sharing capacity, but could also increase sales through word-of-mouth. I find evidence that additional file sharing decreases physical sales but increases digital sales for top-tier artists, though the effects are modest. I also find that file sharing may help mid-tier artists and substantially harms bottom-tier artists, suggesting that file sharing enables consumers to better discern quality among lesser-known artists.
    Keywords: intellectual property, copyright, file sharing, piracy, digital music
    JEL: L82 L86 O34
    Date: 2016–01
  2. By: Hernæs, Øystein (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: We exploit supply-driven heterogeneity in the expansion of cable television across Norwegian municipalities to identify developmental effects of commercial television exposure during childhood. We find that higher exposure to commercial television reduces cognitive ability and high school graduation rates for young men. The effects are largest for exposure during pre-school and elementary school age. We find no effect on high school completion for women, suggesting availability of non-educational media content as a factor in the widening educational gender gap. Based on time-use data, we show that a possible explanation is that television-watching crowds out reading more for boys than girls.
    Keywords: human capital, media, education gender gap
    JEL: J13 J16 J24 L82
    Date: 2016–01
  3. By: Kukharskyy, Bohdan; Gorodnichenko, Yuriy; Roland, Gerard
    Abstract: This paper develops a model of global sourcing with culturally dissimilar countries. Production of final goods requires the coordination of decisions between the headquarter of a multinational firm and managers of their component suppliers. Managers of both units are assumed to have strong beliefs about the right course of action and are reluctant to adjust their decisions. We then characterize the optimal allocation of decision rights across firms when contracts are incomplete. Our theoretical model delivers two key predictions: An incentive of a firm to integrate (rather than outsource) its input supply is decreasing in cultural distance between the home and the host country and decreasing in trade cost between the two countries. Combining data from the U.S. Census Bureau s Related Party Trade with various measures for cultural distance and trade cost, we find empirical evidence broadly supportive of these two predictions.
    JEL: F14 F23 L23
    Date: 2015

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