17 | July | 2008 | Organizations and Markets

Archive for 17 July 2008

File Sharing Controversy: The Chronicle Weighs In

| Peter Klein |

The Chronicle of Higher Education provides a useful summary of the OS-Liebowitz debate on file sharing we’ve been following for a while (thanks to David Glenn for the tip). I like this description of the original piece by Oberholzer-Gee and Strumpf:

The paper seemed like a model piece of empirical social science for the Freakonomics era. Unusual data source analyzed with “instrumental variables”? Check. Counterintuitive conclusion? Check. Implications for hot-button policy debate? Check. The scholars filed an amicus brief in defense of file-sharing companies in the U.S. Supreme Court’s Metro-Goldwyn-Mayer Studios Inc. v. Grokster case in 2005. When a revised version of their working paper appeared in the February 2007 issue of the Journal of Political Economy, it was the lead article.

And people think editorial decisions are made on purely scientific grounds. . . . Anyway, the article includes valuable background information and some interesting details. Strumpf suggests that Liebowitz is pressing the issue so zealously because Liebowitz’s center at UT-Dallas receives funding from the RIAA and “other commercial interests,” a charge I find shockingly inappropriate and unprofessional. (Anyone who knows Liebowitz can attest to his zeal on a number of unpopular issues, such as his defense of QWERTY and his attack on the Boston Fed study of mortgage discrimination.)

I don’t know the primary sources well but one gets the definite impression that Oberholzer-Gee and Strumpf are being less-than-fully candid about their work. Their defenses against various critics (not only Liebowitz) seem weak and unconvincing. Overall, this episode reminds me of the Card-Kreuger controversy over the minimum wage: an empirical paper finds the opposite of what everyone expects and makes a big splash, but the authors don’t have a solid explanation for their findings, there are questions about the data and methods, and specialists aren’t convinced by the results. My conjecture is that in this case, like the minimum-wage episode, the spashy result will not stand the test of time.