IDEAS home Printed from https://ideas.repec.org/p/mar/magkse/202417.html
   My bibliography  Save this paper

Digital vs. Physical Goods: Evidence from the Book Market

Author

Listed:
  • Maximilian Maurice Gail

    (Chair for Industrial Organization, Regulation and Antitrust, Department of Economics, Justus-Liebig-University Giessen)

  • Phil-Adrian Klotz

    (Chair for Microeconomics, Department of Economics, University of Hohenheim)

Abstract

The digitization has reshaped the multimedia industry in a tremendous way and particularly driven the transition from physical to digital goods. With respect to the book industry, Amazon reported that purchases of e-books had surpassed those of print books for the first time in 2011. The goal of this paper is to examine the substitutability between digital and print book formats in a country with fixed book prices (Germany) and a country without such regulated prices (United Kingdom). We use a unique cross-sectional data set of book prices for these two countries and exploit genre as well as publisher variation to estimate cross-format elasticities in an IV setting. We find that consumers basically consider e-books as (imperfect) substitutes for print books, even though there are country-, genre-, and format-specific differences. Our results have important implications for the implementation of fixed book prices and the taxation of different book formats as well as for the release strategies of the publishers for the individual book formats.

Suggested Citation

  • Maximilian Maurice Gail & Phil-Adrian Klotz, 2024. "Digital vs. Physical Goods: Evidence from the Book Market," MAGKS Papers on Economics 202417, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:202417
    as

    Download full text from publisher

    File URL: https://uni-marburg.de/en/fb02/research-groups/economics/macroeconomics/research/magks-joint-discussion-papers-in-economics/papers/2024/17-2024-gail.pdf
    File Function: First version
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Digital goods; e-books; cross-format elasticities; text mining; digital media policy; 3SLS;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mar:magkse:202417. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bernd Hayo (email available below). General contact details of provider: https://edirc.repec.org/data/vamarde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.