Parallel Imports and Music CD Prices

Parallel imports are a significant academic and policy issue. Official investigations into the impact of parallel imports on music CD prices have reached widely conflicting conclusions. This note reports an event study on an international panel of changes in copyright law to permit or disallow parallel imports. The study shows that, on average, legalization of parallel imports was associated with a 7.2–7.9% reduction in the retail price of music CDs.