Gains from digitization: Evidence from gift-giving in music

Marc Bourreau and Pınar Doğan

Journal of Economic Behavior & Organization, 2018, vol. 149, issue C, 106-122

Abstract: In this paper, we focus on recorded music gifts during the holiday season and estimate the reduction in deadweight loss due to the transition from physical CD gift-giving to digital music gift-giving with gift cards. Based on our survey data, we find that music CD gifts generate an average deadweight loss between 15% and 38% of the price. According to our estimates of gift music album sales which are based on U.S. data, the welfare gains from digitization, in terms of eliminated deadweight loss as a percentage of total spending on music albums, were between 5% and 13% during the week when digital sales peak in 2014.

Keywords: Gift-giving; Deadweight loss; Digitization; Music (search for similar items in EconPapers)
JEL-codes: D10 L82 O33 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Gains from Digitization: Evidence from Gift-Giving in Music (2018)
Working Paper: Gains from digitization: Evidence from gift-giving in music (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:149:y:2018:i:c:p:106-122

DOI: 10.1016/j.jebo.2018.03.003

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