The Price of Words

Xing Li, Stanford Univesrity Department of Economics, Megan MacGarvie, Boston University Department of Finance & Economics and National Bureau of Economic Research, and Petra Moser, Stanford University Department of Economics & National Bureau of Economic Research have published Dead Poets' Property - The Copyright Act of 1814 and the Price of Books in the Romantic Period. Here is the abstract.

Although copyright is a subject of intense debate, there is little empirical evidence on the effects of stronger rights on the price of intellectual assets. This paper exploits a differential increase in the length of copyright in favor of books by dead authors under the 1814 U.K. Copyright Act to investigate the causal effects of longer copyright terms on price. Difference-in-differences analyses, which compare the price of new editions of books by dead and living authors before and after 1814, indicate an 8 percent increase in price for each additional year of copyright, and an elasticity of price with respect to longer copyright of 0.9. Results are robust to controlling for book age, author, and time fixed effects, as well as genre fixed effects and controls for literary quality. They are also robust to excluding books by famous authors who died after 1814, and to excluding books by recently deceased authors. Placebo regressions reveal no significant effects for books by dead authors that did not benefit from longer copyrights. Complementary analyses confirm that books become cheaper as they approach the end of copyright.

Download the paper from SSRN at the link.