About five months ago I posted about the famous file-sharing paper by Oberholzer-Gee and Strumpf. I noted that the paper had been criticized in detail by Stan Liebowitz but that Liebowitz was hampered because he could not obtain the data from O-G and S.
The story has now been picked up by Handelsblatt, a leading German financial publication. For those of you who don't read German--I don't--here are some excerpts of the article in English. (The translation is courtesy of Binghamton Univ. associate professor Florenz Plassmann and is posted with his permission. I thank Drexel Univ. professor Bruce McCullough for forwarding the translation to me.)
Recently, this paper has sparked a heated discussion. The relevance of the debate extends far beyond the paper in question. It questions the reliability of empirical studies in economics, and may ultimately challenge the way in which the crème de la crème of scientific journals deals with scientific evidence.
The key question is: how can a study that is based on secret data that nobody has double-checked be printed without close examination by one of the most prestigious economics journals? This is especially puzzling because the supplier of the data has a special interest in a certain result. The study of the two economists from Harvard and Kansas is based on proprietary data on music downloads, which the authors received from the file sharing services "MixmasterFlame" and "FlameNap."
. . . .
Liebowitz knew of the filesharing study before it was published because it had been circulated as a working paper. In his letter he told Levitt that, despite repeated requests, the authors did not provide him with an opportunity to check their results. Could he please use his influence as editor of the "JPE" to make such checks possible? Levitt declined to tell Handelsblatt whether he followed up on this request.
It appears that he did not. Even one year after publication, the authors still keep their data to themselves. Oberholzer-Gee told Handelsblatt that they had to sign an agreement not to share the data to get them from the file sharing service. The authors argued that they had to "protect their sources" and declined to provide Handelsblatt with either a copy of the agreement or the name of a reference at the file sharing service who could confirm their version.
Liebowitz pressed Levitt, the editor of the "JPE," to at least correct several mistakes and ambiguities before publishing the paper.
For example, the authors write that about half the reductions in music CD sales are the result of the increase in market share of music discount stores with smaller inventories. Liebowitz argues that this cannot possibly be correct. He calculates that, even under extreme assumptions, the reduction in inventories can at most account for one-sixth of the decrease in sales. "It is unbelievable that a top-journal like the "JPE" would publish such claims without any evidence," Liebowitz complains in his letter, and he points Levitt to an entire series of additional errors or ambiguities.
Levitt forwarded Liebowitz’ letter to the authors, who ignored it—their study was published with only minor changes. Since then, file sharing services can refer to an academic paper in one of the top economics journals to defend themselves against the music industry.
In principle, like many other journals, the "JPE" requires that authors publish not only their results but also disclose the data and the methods that they use to derive them. However, this requirement does not apply to Oberholzer-Gee and Strumpf—their paper was accepted before the requirement became binding. "This has nothing to do with science," criticizes Bruce McCullough, professor of decision sciences at Drexel University in Philadelphia. "Without scrutiny, there can be no science," says the expert on the replicability of empirical results in economics.
The translation of the entire article is here (Word .doc).