Despite tremendous debate and policy interest in software piracy, the accuracy of piracy statistics compiled by the Business Software Alliance (BSA) has been accepted at face value. Based on a review of the BSA methodology and empirical analysis, I conclude the following. First, prior cross-country studies of software piracy in the years 2002 and earlier were mis-specified: they more likely explained the demand for legitimate software relative to computers in use rather than piracy rates. Second, BSA statistics were biased on a cross-country basis either in the years 2002 and earlier, or the years 2003 and after, or both. Third, from 2003 onward, following a change in the BSA consultant and methodology, piracy rates across countries were inflated by an average of almost 4% points.
Ivan P. L. Png