Empirics prove the plan increases prices

Difference-in-differences estimates of these data reveal a substantial increase in price in response to longer copyright terms. Controlling for the age of a book, author fixed effects, time fixed effects, and physical characteristics, the price of books by dead authors increased by an additional 7.19 shillings after 1814, compared with books by living authors. Relative to an average price of 19.38 shillings before 1814, this implies a 37% increase, roughly 3% for each additional year of copyright, and an elasticity of price with respect to copyright length of 0.45.

These results are robust to a broad range of alternative specification, including alternative controls for literary quality and for variation in price across genres.9 Time-varying estimates yield no evidence of differential pretrends in the price of books by dead authors. A placebo test moves the post period to begin in 1809, five years before the Copyright Act, to check whether the change in copyright length may have been anticipated. This test indicates no differential increase in price before the 1814 Act. Estimates increase when we exclude books by Sir Walter Scott (1771–1832) and Lord Byron (1788–1824), two extremely popular authors who had died after 1814. More generally, results are robust to excluding books by recently deceased authors.

The main threat to the identification strategy is that books by dead authors may have become more expensive after 1814 as a result of changes in tastes or other unobservable factors that differentially increased the price of books by dead authors. To address this issue, we examine changes in price for books by dead authors that did not benefit from longer copyrights. Specifically, we exploit the fact that the 1814 Act had no effect on the length of copyright for books by authors who had died between 14 and 28 years after the publication of the first edition (because these books had already been protected for 28 years under the 1710 Statute of Anne). Placebo regressions for these books yield no evidence of a differential increase in price.

How did extensions in the length of copyrights increase price? Intuitively, copyrights increase price by extending the duration of the publishers’ monopoly over a book title. If monopolistic publishers practice intertemporal price discrimination, additional years of copyright protection extend publishers’ ability to price discriminate. In other words, publishers can sell to consumers with high willingness to pay, and delay sales to consumers with a lower willingness to pay because other publishers cannot enter with a cheaper copy.