How Costly is Modern Maritime Piracy?

This paper focuses on the impact of maritime piracy on international trade. Piracy increases the cost of international maritime transport through an increase in insecurity regarding goods deliveries. Bilateral trade flows between the main European and Asian countries over the 1999 to 2008 period are used to estimate an augmented gravity model that includes various measures of piracy acts. We found robust evidence indicating that maritime piracy reduces the volume of trade; the effect of 10 additional vessels hijacked being associated to an 11% decrease in exports. Consequently, the current cost of piracy in terms of international trade destruction is estimated at 24.5 billion dollars.

That is from a paper by Bensassi & Martínez-Zarzoso (Review of International Economics, November 2012). An ungated version is here. 

Piracy and Movie Revenues

In this paper we make use of a quasi-experiment in the market for illegal downloading to study movie box office revenues. Exogenous variation comes from the unexpected shutdown of the popular file hosting platform Megaupload.com on January 19, 2012. The estimation strategy is based on a quasi difference-in-differences approach. 

We compare box office revenues before and after the shutdown to a matched control group of movies unaffected by the shutdown. We find that the shutdown had a negative, yet insignificant effect on box office revenues. This counterintuitive result may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay.

From a new working paper by Peukert and Claussen (October 2012).