Effects of Taxation on Software Piracy Across the European Union

Nicolas Dias Gomes (), Pedro Cerqueira and Luís Alçada Almeida
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Nicolas Dias Gomes: Faculty opf Economics, University of Coimbra and INESC-Coimbra, Portugal
Luís Alçada Almeida: Faculty opf Economics, University of Coimbra and INESC-Coimbra, Portugal

No 2014-03, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

Abstract: This paper explores the relation between levels of taxation among different types of households in the European Union and the levels of software piracy from 1996 to 2010. It extends previous works introducing a large panel data set for the European Union and it´s different regions. We estimate our model using the fixed effect, comparing results from the Euro Area and the Countries that joined EU in 2004 and 2007. Results show that levels of taxation increase the levels of software piracy losses; moreover these results depend on marital status and number of children. The weight of taxation on GDP, namely the taxes on consumption, have a positive effect on piracy losses while the impact of inflation is negative and marginal. Additional to this we also found that the relative importance of these taxes in relation to total taxation can affect this phenomenon. An increase in the weight of capital taxation would decrease software piracy while this effect was opposite when considering the relative importance of consumption taxes.

Keywords: Panel data; personal taxation; software piracy. (search for similar items in EconPapers)
JEL-codes: C23 H20 O52 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2014-01
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Working Paper: Effects of taxation on software piracy across the European Union (2014)
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