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- Title
MEASURING THE EFFECT OF NAPSTER ON RECORDED MUSIC SALES: DIFFERENCE-IN-DIFFERENCES ESTIMATES UNDER COMPOSITIONAL CHANGES.
- Authors
Hong, Seung‐Hyun
- Abstract
SUMMARY This paper measures the effect of Napster on record sales. I treat the introduction of Napster as a technological event that only Internet users experienced, and use a difference-in-differences (DD) approach. Because of potential compositional changes in Internet users, I examine identifying assumptions for the DD estimator under compositional changes and develop a test for identifying restrictions. To address potential bias due to compositional changes, I extend DD matching estimators to the case of two-variate propensity scores. I find evidence suggesting that file sharing is likely to explain 20% of total sales decline, which is driven by households with children aged 6-17. Copyright © 2011 John Wiley & Sons, Ltd.
- Subjects
NAPSTER (Computer software); SOUND recording industry; SALES; MUSICAL composition; INTERNET users; HOUSEHOLDS; ESTIMATION theory
- Publication
Journal of Applied Econometrics, 2013, Vol 28, Issue 2, p297
- ISSN
0883-7252
- Publication type
Article
- DOI
10.1002/jae.1269