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What Is the True Loss Due to Piracy? Evidence from Microsoft Office in Hong Kong

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  • Tin Cheuk Leung

    (Chinese University of Hong Kong)

Abstract

Using a unique conjoint data set drawn from 281 college students in Hong Kong, I estimate a random-coefficient discrete choice demand system for Microsoft Office from legal and various illegal sources. Counterfactual results show two things. First, most students would switch to Internet piracy even if the government eradicated street piracy. This explains why software piracy in Hong Kong remains well above 40% despite the government's successful measures to bring down street piracy. Second, the true gain from shutting off all sources of piracy is HK$48.6 (US$6) per person, only 15% of the Business Software Alliance's estimated cost of piracy. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 95 (2013)
Issue (Month): 3 (July)
Pages: 1018-1029

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Handle: RePEc:tpr:restat:v:95:y:2013:i:3:p:1018-1029

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Keywords: Business Software Alliance; intellectual property enforcement; Microsoft Office; software piracy;

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Cited by:
  1. Leung, Tin Cheuk & Ng, Travis & Ho, Chun-Yu & Chao, Hong, 2013. "To Root or Not to Root? The Economics of Jailbreak," MPRA Paper 47409, University Library of Munich, Germany.
  2. Leung, Tin Cheuk, 2012. "Music Piracy: Bad for Record Sales but Good for the iPod?," MPRA Paper 45772, University Library of Munich, Germany.

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