How Spotify is shaping our tastes and purchases
Online music streaming apps such as Spotify heavily influence which songs and artists capture our imagination today
New Delhi: Music streaming platforms have an extraordinary influence on the music choices of consumers, determining which songs and artists tend to be more successful than others, shows a new National Bureau of Economic Research (NBER) working paper by Luis Aguiar of the European Commission’s Joint Research Centre and Joel Waldfogel of the University of Minnesota. Analyzing data for 2016 and 2017 from Spotify—one of the world’s largest music streaming firms—the authors show that being placed on the day’s top songs list (Today’s Top Hits) led to 20 million additional streams, which translates to $116,000 and $163,000 in additional revenue, respectively, from Spotify alone. Playlists also affect the success of new songs and new artists, the study shows. Getting on the top of the New Music Friday playlist in the US is worth roughly 14 million streams ($84,000-$117,000). The major global lists tend to promote major-label and US-origin music, while the New Music Friday lists provide heavier coverage of independent and domestic music, the authors found.
Given the growing power of platform markets such as Spotify, the authors argue for greater regulatory scrutiny over how such platforms exercise their power.
Being uprooted from one’s homeland leads people to place greater emphasis on human capital investment than on investments in physical capital or real estate, shows a recent study by Sascha O. Becker of the University of Warwick and co-authors. They analyze the education levels and investment behaviour of Polish people who were forced to migrate in the aftermath of World War II, when Poland’s frontiers were redrawn. It is found that the loss of physical possessions during displacement led to a shift in preferences towards “mobile assets” such as education. Consequently, descendants of forced migrants fared better than other Poles in terms of years of schooling, though no such differences existed before the World War and displacement. The effect is seen to persist over three generations. The authors also find that forced migration acts as a stronger push for investment in human capital compared to voluntary migration.
Voluntary migration and the associated remittances back home can provide insurance to the poor during times of adversity, shows an IMF working paper by economists Zsoka Koczan and Franz Loyola. They analyzed the remittances inflow in Mexico during the Peso crisis in 1994 and the global financial crisis in 2008. They found that poorer households often saw a spurt in remittances during crises, with the effect more pronounced during the 2008 crisis. Further analysis reveals that remittances helped reduce income inequality in Mexico.
The drivers of increasing carbon dioxide (CO2) emissions from richer countries and poorer countries remain very different, according to a World Bank report by Kangyin Dong, PhD student at Rutgers University, New Jersey, and co-authors. Their analysis of emissions between 1980 and 2015 shows that economic growth led to higher emissions from richer countries, while population growth is the main reason for emissions in poorer countries. CO2 emissions increased by more than 80% during these 35 years, with more than 70% of the rise being contributed by upper-middle-income countries. However, the rise in emissions was limited to some extent thanks to improved energy efficiency.
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