Software piracy and income inequality

Abstract

We investigate the extent to which income inequality influences national piracy rates across a sample of 34 countries. Economic inequality seems to have a negative significant effect on national rates of piracy. Consistent with previous studies, we also find that judicial efficiency affects piracy rates. Additionally, research results show that income and education are not important determinants of piracy rates.

Notes

¹ One feature of information goods is that they have large fixed costs and small variable costs of reproduction (Varian, 1997).

² Further information on the methodology employed to construct piracy rates can be found in the recent report on global software piracy elaborated by the International Planning Research Corporation (IPRC) for the Business Software Alliance (BSA) and Software Information Industry Association (SIIA) (IPRC, 2003).

³ The Gini coefficient is the area between the Lorenz curve and the 45 degree equality line. The Gini index ranges from 0 indicating perfect equality to 1 indicating perfect inequality.

⁴ The data set is described in detail at http://www.wider.unu.edu/wiid/wiid.htm.

⁵ The following countries are included in the analysis presented in Table 2: Australia, Brazil, Canada, Chile, China, Colombia, Denmark, Dominican Republic, Finland, France, Honduras, Hong Kong, Hungary, India, Indonesia, Israel, Italy, Mauritius, Mexico, Netherlands, Norway, Pakistan, Peru, Philippines, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Thailand, Turkey, United Kingdom and Zimbabwe.