Felix Oberholzer and Koleman Strumpf, of Harvard and the University of North Carolina, respectively, have published an interesting study on the effect of file sharing on record sales. They looked at album sales, actual download traffic for individual songs, and several other variables. Their main conclusion that file sharing had little or no effect on sales, and they could not reject the statistical hypothesis that filesharing had no effect at all on sales. Though these effects are not statistically significant, the data suggests that file sharing may boost the sale of the most popular albums, and may depress the sales of less popular albums, with a near-zero net effect on sales.

How much should we trust these results? I don’t know. The authors look like respectable academics, but their methodology is complex enough that I am not qualified to evaluate it. Perhaps a more qualified reader will have something to say about the study’s methodology.

Senators Orrin Hatch and Patrick Leahy have introduced a new bill, the PIRATE Act, that would authorize the U.S. government to bring civil lawsuits against copyright infringers, and would create a $2 million fund to pay for such suits. (Copyfight has the details.) Rather than doing this, it would be more efficient simply to give copyright owners the $2 million in cash, and let them decide whom to sue, or not to file suits at all.

If spending $2 million on lawsuits will deter enough infringement to increase (the present value of) future copyright revenues by more than $2 million, then copyright owners will find it in their interest to file the suits themselves. If not, then the government has no business filing the suits, since doing so would burn $2 million of government money to create a benefit of less than $2 million. So let’s save ourselves the trouble, and just give the cash to the RIAA and MPAA.

Criminal enforcement by the government might make sense, since private parties can’t bring criminal actions. But civil suits brought by the government, on the same terms those suits could be brought by copyright owners, can only be inefficient.

Worst of all, asking the Department of Justice to spend its valuable time and attention on small-fry copyright suits carries a high opportunity cost. The DoJ has much more important things to do. Copyright infringement is bad, but it’s hardly the greatest threat we face.