From Ars Technica

We've all seen the studies trumpeting massive losses to the US economy from piracy. One famous figure, used literally for decades by rightsholders and the government, said that 750,000 jobs and up to $250 billion a year could be lost in the US economy thanks to IP infringement. A couple years ago, we thoroughly debunked that figure. For years, Business Software Alliance reports on software piracy assumed that each illicit copy was a lost sale. And the MPAA's own commissioned study on movie piracy turned out to overstate collegiate downloading by a factor of three.

Can we trust any of these claims about piracy?

The US doesn't think so. In a new report out yesterday, the government's own internal watchdog took a close look at "efforts to quantify the economic effects of counterfeit and pirated goods." After examining all the data and consulting with numerous experts inside and outside of government, the Government Accountability Office concluded (PDF) that it is "difficult, if not impossible, to quantify the economy-wide impacts."

More specific studies that focus only on single industries don't fare much better because "the illicit nature of counterfeiting and piracy makes estimating the economic impact of IP infringements extremely difficult." And when it comes time to choose a substitution rate (how much of the infringing activity should be counted as a lost sale), we're left only with "assumptions... which can have enormous impacts on the resulting estimates."

The GAO then went on to slam three particular reports often linked to the government. They're all commonly cited, they're all bogus, and at least one is still being used officially.

[More...] [Comments...]