Economics of Open Access Literature Review

FEBRUARY 23, 2009

Bergstrom & Bergstrom 2004 PNAS

  • Huge commercial markup
    • Per page
    • Per citation
  • Difference widened particularly in 80s/90s
  • Commercial publishers use bundling to increase profits
    • Decreases variation in WTP
  • Non-profit publishers use bundling
    • To subsidise societal public goods

McCabe 2002 AER

  • Diff-diff analysis of journal prices post merger activity
    • 1990s
  • Results
    • 10% price increase 1. Controlling for quality

McCabe & Snyder 2005 AER

  • Model of journal pricing
  • Which journals go open source?
  • Result
    • Lower quality ones
  • Intuition
    • As journal quality increases
      1. Reader surplus increases
      2. Author surplus decreases
    • Less likely to get published
    • => Switch pricing balance accordingly

Willinsky 2005 OJSDO

  • Details savings of switching to open-source system

Tenopir & King 2000 Book

  • History
    • Journals started in late C16
    • Hidden colleges emerged in early C17
      1. Comms
        • Private correspondence
        • Recognised need for formal correspondence
        • Alternatives to journals crap - Books too slow - Copyists too expensive
    • Drive to electronic media in 1960-80
      1. <= explosion of research on library science
      2. Initial difficulties
        • Economies of scale in computing did not emerge
        • Standardization difficulties
  • Scientists
    • Reading positively related to performance
    • Browsing (perusal) is the most important way of locating readings
    • Articles more likely to be read closer to time of initial publication vs much later
      1. But depth of reading goes the other way
      2. Also older articles more likely to be used for research
  • Publishers
    • Trends 1975-1995
      1. Pages per scientist increased 50%
      2. Journal price x7 - Only 50% explicable by
        • Pages
        • Inflation
    • Article costs
      1. $4500 per article
      2. $325 per article page
  • Electronic publishing
    • Advantages to electronic media
      1. Speed/convenience of delivery
      2. Opportunity to experiment with electronic media
      3. Timeliness of publication
      4. Location independence
      5. Instant updates/revisions
      6. Improved searchability
      7. Ability to create own personal electronic file of articles
      8. Space savings
      9. Not reliant on library collection
    • Savings
      1. 4% for low circulation
      2. 30% and beyond for large circulations

Chrissanthis & Chrissanthis 1994 JEE

  • Thorough empirical model of econ journal prices
    • 1985 data
  • Non-profit have no significant difference in prices

Dewaitrapont et al 2007 JEEA

  • Econometric analysis of journal pricing
  • Results
    • Commercial charge x3
    • Commercial on behalf of non-profit society charge x2
    • Very large differences across fields
      1. A factor of 6 unexplained
        • Law cheapest
        • Physics/chemistry most expensive
    • Market concentration
    • ve effect

Jeon & Rochet 2007 WP

  • Theoretical model of academic journal pricing
  • First best pricing
    • Negative reader price
      1. Positive externalities of readers on authors
  • Second best pricing
    • Open access
      1. Fake readers make -ve price impossible
  • Comparative statics
    • Non-profit switches to open access
    • Quality/readers decrease
    • Intuition
      1. Readers don’t bear cost of reading
        • Would have higher standards if they were paying

UK Commons 2004

  • Advantages of digitization - Assists collation - Lowers distribution cost - New media e.g. hyperlinks - Improved searching - Easier usage stats
  • Research accessibility limited in NHS - Due to subscription prices
  • Central repositories greatly facilitate research
  • Study of costs of OA - It costs 30% less
  • Making author pay => greater competition among journals - You have to bear the cost of applying to a journal with a higher rejection rate
  • Publication integrity argument bollocks - Because of reputation effect
  • Why should authors subsidise submissions? - Make two fees 1. Submission fee covers refereeing cost 2. Publication fee covers publication cost
  • Need to worry about academic societies - Losing an important source of cross-subsidizing income

Bergstrom 2001 JEP

  • Commercial publishers charge a huge markup
  • Commercial publishers initially charged competitive rates - Took advantage of inability of non-profit publishers to keep up with demand
  • Ex post lockin permits price hikes