What is the True Loss Due to Piracy? Evidence from Microsoft Office in Hong Kong

50 Pages Posted: 3 Sep 2010 Last revised: 14 May 2014

Date Written: September 9, 2010

Abstract

Using a unique conjoint data set drawn from 281 college students in Hong Kong. I estimate a random-coefficient discrete choice demand system for Microsoft Office from legal and various illegal sources. Counterfactual results show two things. First, most students would switch to Internet piracy even if the government eradicated street piracy. This explains why software piracy in Hong Kong remains well above 40% despite the government's successful measures to bring down street piracy. Second, the true gain from shutting off all sources of piracy is HK$48.6 (US$6) per person, only 15% of the Business Software Alliance's estimated cost of piracy.

Keywords: Business Software Alliance, intellectual property enforcement, Microsoft Office, software piracy,

JEL Classification: L86, K42, O34

Suggested Citation

Leung, Tin Cheuk, What is the True Loss Due to Piracy? Evidence from Microsoft Office in Hong Kong (September 9, 2010). Available at SSRN: https://ssrn.com/abstract=1670608 or http://dx.doi.org/10.2139/ssrn.1670608

Tin Cheuk Leung (Contact Author)

Wake Forest University ( email )

Winston-Salem, NC 27109
United States

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