Archive for March 2007

Downloads and sales

March 30, 2007

Here’s an interesting analysis—‘The Effect of File Sharing on Record Sales
An Empirical Analysis’ by Felix Oberholzer and Koleman Strumpf, pdf version of the manuscript .

The paper is forthcoming in Journal of Political Economy.

And the abstract:

A longstanding economic question is the appropriate level of protection for intellectual property. The Internet has drastically lowered the cost of copying information goods and provides a natural crucible to assess the implications of reduced protection. We consider the specific case of file sharing and its effect on the legal sales of music. A dataset containing 0.01% of the world’s downloads is matched to U.S. sales data for a large number of albums. To establish causality, downloads are instrumented using technical features related to file sharing, such as network congestion or song length, as well as
international school holidays. Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates. Moreover, these estimates are of moderate economic significance and are inconsistent with claims that file sharing is the primary reason for the recent decline in music sales.

Here’s another nice quote from the paper:

Even in the most pessimistic specification, five thousand downloads are needed to displace a single album sale. We also find that file sharing has a differential impact across sales categories. For example, high selling albums actually benefit from file sharing. In total the estimates indicate that the sales decline over 2000-2002 was not primarily due to file sharing. While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing.

Category: music

I could have used this as a kid

March 28, 2007

Nothing like the pain when I learned to write with a fat, soft-leaded, pencil. And the hit my intellectual confidence took when they tried to fail me in the second grade because my writing was not neat enough.

The world is not that safe for lefties.

Cool Tool: SmudgeGuard

Powered by ScribeFire.

Standup economist

March 16, 2007

It is pretty good.

Principles of economics

Pretty affecting

March 16, 2007

No other comment necessary: Arthur Silber .

Using data

March 14, 2007

This post: Omegamom-Metal-Night got me thinking about music from those days. And I remembered one of big shows I went to see as a young adult—Van Halen

Jamie’s Cryin by Van Halen (youtube)

I had a broken toe, and was extremely drunk/stoned at the show. All I remember now about it is how my toe throbbed with each bass note (I was wearing steel toed boots to protect myself) and how I thought that the lead singer David Lee Roth was the devil. The entire thing was not my smartest move.

I would be shocked if L went in such a state to see a show, because then I might predict bad things for her future. But I did see such a show in that state and showed poor judgement at the time. It did not really lead to any bad things happen to me in the long run—at least no more than normal. Probably luck, but it’s a delicate thing to decipher.

My experience is data. I want to use those data to partially help predict her future and help her make good decisions. But how can I do so? It seems like an impossible task sometimes: The environment has changed in unknown ways, and she is a completely different person than me in so many ways. There is also ‘survivorship bias’ to worry about in deciphering my experiences, and the experiences of others. We need large samples of people, but even that cannot really help us with survivorship bias.

All that being said, it was a stupid decision, and I don’t think that guy is the devil anymore, either.

(update: wordpress won’t let me embed a youtube video today.)


March 14, 2007

the piece by Varian linked here explains nicely what I was trying to say yesterday about theory, data, and Taleb’s piece:

Economist’s View: Hal Varian: What Use is Economic Theory?

Interesting discussion of ‘ex-ante’ versus ‘ex-poste’ here

March 13, 2007

NNT’s Blog: Quiz 7 – The problem with “drift” (The 1st who gets it wins a copy of The Black Swan )

For a guy who likes to complain about economics and economists, NNT’s point seems to be pretty close to arguing that you should take markets and basic economic arguments into account when you look at data. But maybe his points are too subtle for me.

I liked the message in ‘Fooled by Randomness,’ although I found the writing to be a bit rambly and the tone pompous.

I am looking forward to reading the new book—‘The Black Swan’—soon.

How does this relate to reading personal blogs. A lot, I think. I should not over or under react. Vague, but a reminder to myself.