MONTREAL, Feb. 7, 2013 /CNW Telbec/ - Far from contributing to the
vitality of Quebec culture, the establishment of a fixed book price, as
proposed by the Nos livres à juste prix (Our books at a fair price) lobby group, would ultimately reduce total
book sales by 14%. Quebec titles would be even harder hit, with a 17%
drop in sales. This is the first time these figures have been available
for the province of Quebec, and the details of the calculations can be
found in an MEI Note published today.
Contrary to the claims of Nos livres à juste prix, the establishment of a fixed price reduces the range of available books. Indeed, since the abolition of the fixed
price in England, publishers in that country have published a growing
number of titles, while in Germany, where the fixed price is still in
effect, the number of new titles has remained constant. There is
therefore a greater diversity of works when prices are not controlled.
"The industry repeatedly cites the French case, where book prices seem
to have risen more slowly than in England, a country where prices are
not fixed. This reasoning is seriously flawed, however, based as it is
on an unweighted average. One should expect, in a thriving market for
new books like England's, a certain proportion of highly specialized
books that sell for a high price. It is precisely the broad range of
books that skews the average price," explains Vincent Geloso, coauthor
of the Economic Note.
A law that would prevent retailers from offering discounts to readers
would have the direct result of raising the prices of the most popular
books. Of course, eliminating competition by fixing prices would
perhaps allow the book industry to earn higher profits and save certain
bookstores. "However, how would Quebec readers respond to having to pay
more for their books? It's a safe bet that some would switch to
electronic books and Internet shopping. Others would probably reduce
their book purchases," adds his colleague Youri Chassin.
"Cloaked in noble intentions for the protection of culture, the book
industry is requesting the creation of nothing less than a cartel, for
the explicit purpose of price fixing. Remember that a similar cartel
was abolished by the Competition Bureau of Canada in 1951," explains
The Economic Note entitled The Consequences of a Fixed Book Price was coauthored by Vincent Geloso, doctoral candidate in economic
history at the London School of Economics and economist at the MEI, and
Youri Chassin, economist at the MEI. The complete publication and the
annex with the relevant calculations are available at iedm.org.
The Montreal Economic Institute is an independent, non-partisan,
not-for-profit research and educational organization. Through its
publications and conferences, the MEI stimulates debate on public
policies in Quebec and across Canada by proposing wealth-creating
reforms based on market mechanisms.
SOURCE: MONTREAL ECONOMIC INSTITUTE
For further information:
Ariane Gauthier, communications coordinator, Montreal Economic Institute
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