Michael Geist

Industry Canada's release earlier this month of an independent study on the impact of P2P file sharing generated considerable public interest and some debate from economists around the world who were provided with complete access to all the raw data.  First out of the blocks was Stan Liebowitz, a Texas economics professor who immediately pronounced that "without going into details of the study we can ask whether this result is even remotely plausible" and that "the result is so counterintuitive that I think it fails the laugh test." While those comments generated headlines, once Liebowitz had a chance to actually view the study and the data, he dropped that language and acknowledged that some of the initial criticism was too harsh.  His primary criticism is that:

the authors present two sets of results, one for the entire sample and one just for downloaders. It makes little or no sense to look only at downloaders and when they do so the authors find a result that is not only implausible but is actually is impossible to be true, given their data. When the appropriate full sample is used the results are still likely to be biased upward because the authors do not fully account for the impact of music interest, which impacts both downloading and purchasing.

Birgitte Andersen, one of the authors of the study, has now posted a response to Liebowitz. 

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