Presentation from EALE2014.

1. Internet piracy and book sales. A field experiment.
Wojciech Hardy
Michał Krawczyk
EALE `14
Joanna Tyrowicz
Group for Research in APplied Economics

2. Summary of the results
Book industry representatives’ concern about internet piracy might be exaggerated.
(At least) for now.
•sssssssss
2

3. •Many studies for film and music industries.
•Mixed results depending on:
–The methodology.
–The analyzed good.
–The analyzed period.
•A few studies on book industry. But:
–Small-scale (almost case studies).
–Specific genres of books.
–Not really on piracy.
3
Design
Recruitment
Book Data
Literature
Matching
Treatment
A year passes...

4. •Many studies for film and music industries.
•Mixed results depending on:
–The methodology.
–The analyzed good.
–The analyzed period.
•A few studies on book industry. But:
–Small-scale (almost case studies).
–Specific genres of books.
–Not really on piracy.
3
Design
Recruitment
Book Data
Literature
Matching
Treatment
A year passes...
Main problems:
Seasonal effects
Causality
Omitted variable
Perfect tool? Experiments!

5. In general
•The sample should be:
–Large (for statistical inference).
–Varied (for representativeness).
–Long (to control for seasonal effects).
•The experimental methodology would deal with:
–Reverse causality (a reference group).
–Omitted variables (randomized treatment application).
In detail
•Acquire book data.
•Match them in `pairs’ (two or more books as similar as possible!).
•Protect one randomly chosen book in each pair.
•Do it for a year.
•Compare the two outcomes.
4
Design
Recruitment
Book Data
Literature
Matching
Treatment
A year passes...

6. In general
•The sample should be:
–Large (for statistical inference).
–Varied (for representativeness).
–Long (to control for seasonal effects).
•The experimental methodology would deal with:
–Reverse causality (a reference group).
–Omitted variables (randomized treatment application).
In detail
•Acquire book data.
•Match them in `pairs’ (two or more books as similar as possible!).
•Protect one randomly chosen book in each pair.
•Do it for a year.
•Compare the two outcomes.
4
Design
Recruitment
Book Data
Literature
Matching
Treatment
A year passes...
Contribution?
New industry
New methodology
New conclusions

7. •Around 70 Polish publishers contacted.
•11 accepted.
•9 went through with providing all of the data.
The specialities of the publishers varied:
•Law-focused, fantasy-focused, mixed, etc.
•Foreign versus national.
Both medium and larger publishers [some not very popular books and some bestsellers (one excluded)].
Overall: we managed to get a considerable sample.
5
Design
Recruitment
Book Data
Literature
Matching
Treatment
A year passes...

8. In total: almost 250 books.
Other variables: E-book existence, date of publishing, price, sales forecasts, first print, etc.
6
Design
Recruitment
Book Data
Literature
Matching
Treatment
A year passes...

9. We match them into pairs (groups)
The variables they are matched on:
–Publisher
–Segment
–Publication date (current ed.)
–Edition number
–Page count
–Versions available (type of cover, digital)
–Sales forecasts (monthly)
–Number of unauthorized copies found prior to the experiment
Matching results:
–Groups of two: 94
–Groups of three: 13
–Groups of five: 1
7
Design
Recruitment
Book Data
Literature
Matching
Treatment
A year passes...

10. Within each group we have randomly picked protected and control titles.
Thus both groups were comparable.
We did nothing to the Control Treatment (CT) group.
Agency Plagiat.pl removed unauthorized copies from the Enforcement Treatment (ET) group.
We observed both groups between 11.2012 and 9.2013.
8
Design
Recruitment
Book Data
Literature
Matching
A year passes...
Treatment

11. Within each group we have randomly picked protected and control titles.
Thus both groups were comparable.
We did nothing to the Control Treatment (CT) group.
Agency Plagiat.pl removed unauthorized copies from the Enforcement Treatment (ET) group.
We observed both groups between 11.2012 and 9.2013.
8
Design
Recruitment
Book Data
Literature
Matching
A year passes...
Treatment
A note on file-sharing in Poland.
Alexa ranking of
„most popular websites”:
Chomikuj.pl – 17th
Pirate Bay – 66th

12. Within each group we have randomly picked protected and control titles.
Thus both groups were comparable.
We did nothing to the Control Treatment (CT) group.
Agency Plagiat.pl removed unauthorized copies from the Enforcement Treatment (ET) group.
We observed both groups between 11.2012 and 9.2013.
8
Design
Recruitment
Book Data
Literature
Matching
A year passes...
Treatment
A note on file-sharing in Poland.
Alexa ranking of
„most popular websites”:
Chomikuj.pl – 17th
Pirate Bay – 66th

13. •Two manipulation checks:
1)Based on the data from Plagiat.pl
2)Three research assistants:
–Searched for 20 titles each.
–Found fewer protected books.
–If found – searched longer.
–If found – mostly at non-‚standard’ sources.
9
Sales Data
Tests
Base Regressions
Manipulation Check
Quantile Regressions
Conclusions

14. •We received sales data.
•Some distribution.
•They could be negative (what we did)
•Smth by genre?
10
Sales Data
Tests
Base Regressions
Manipulation Check
Quantile Regressions
Conclusions

15. Two comparable groups -> simple testing should suffice.
•No difference in sales!
•No difference in variance!
11
Sales Data
Tests
Base Regressions
Manipulation Check
Quantile Regressions
Conclusions

16. •Let’s recheck our strategy and add controls.
•No results!
12
Sales Data
Tests
Base Regressions
Manipulation Check
Quantile Regressions
Conclusions

17. •Popularity? (see this and that)
•No results!
13
Sales Data
Tests
Base Regressions
Manipulation Check
Quantile Regressions
Conclusions

18. •Good thing about piracy that you don’t need a result
14
Sales Data
Tests
Base Regressions
Manipulation Check
Quantile Regressions
Conclusions
We have performed a large field experiment on piracy’s impact on book sales. We applied a robust methodology and checked for more complex relationships. Internet piracy does not seem to pose a threat to the book industry. We cannot predict the future and piracy’s impact on the e-book industry.

19. Thank you for your attention! Author: Wojciech Hardy e-mail: whardy@wne.uw.edu.pl
More about our research on
http://grape.uw.edu.pl/ipiracy
Twitter: @GrapeUW