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Power Laws and Skew Distributions: An Application to Performance Royalty Income

Author

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  • Ivan L. Pitt

    (American Society of Composers, Authors and Publishers)

Abstract

Royalty income derived from copyrighted song-titles is often highly skewed. This skewness, in which a relatively small number of songwriters earn relatively more royalty income than other members or affiliates in Performing Rights Organizations, is said to follow Zipf’s Law or a Pareto distribution. Skewness in royalty income can be explained, in part, by some successful songwriters having larger catalogs of songs that are performed more frequently by radio stations, television stations, and other public places, such as retail outlets, bars, restaurants and clubs. The skew-t distribution model is generalized with location, skew, scale, and degrees of freedom parameters and is used to analyze royalty income when skewness and heavy-tails (outliers) are present. The multivariate log-skew-t maximum likelihood model presented here provides a better fit over other methods when the normal (Gaussian) assumptions and graphical methods may be inappropriate.

Suggested Citation

  • Ivan L. Pitt, 2013. "Power Laws and Skew Distributions: An Application to Performance Royalty Income," Journal of Income Distribution, Ad libros publications inc., vol. 22(2), pages 148-159, June.
    • Handle: RePEc:jid:journl:y:2013:v:22:i:2:p:148-159
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    File URL: http://jid.journals.yorku.ca/index.php/jid/article/view/40322
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    Cited by:

    1. Ivan L. Pitt, 2021. "Life cycle effects of technology on revenue in the music recording industry 1973–2017," SN Business & Economics, Springer, vol. 1(1), pages 1-29, January.

    More about this item

    Keywords

    power laws; Zipf’s law; Pareto distribution; skew-normal; skew-t; performance copyright royalty income;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Z1 - Other Special Topics - - Cultural Economics

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