A Canadian study, The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music, has found that people that people that use file-sharing services buy more music.

People that don’t appear to understand the difference between a correlation and cause-and-effect are falling all over themselves saying that this study proves that illegal file-sharing increases music sales. This is despite the fact that file-sharing has been rising for years and CD sales have been declining.

Unfortunately, the confusion appears to come directly from the report authors, Birgitte Andersen and Marion Frenz. According to the authors, “music downloads have a positive effect on music purchases among Canadian downloaders but….there is no effect taken over the entire population aged 15 and over.”

Reading through the report, though, it looks like Anderson & Frenz actually found a positive correlation, not a positive effect, between file-sharing and music purchases. In other words, music fans are more likely to use P2P music services, buy music online and buy CDs that people that aren’t interested in music.

But they aren’t going to make headlines saying that music fans buy more music, are they?

Here are the highlights of the study:

• Music fans purchase significantly more CD albums.
• People that think that like the music that is currently available buy more music.
• People who buy a high number of DVDs, videogames, cinema tickets and concert tickets also purchase a higher number of CD albums. Music and other entertainment goods are not substitutes; instead the relationship is linked to a life-style choice of certain groups of society.
• The researchers found no direct relationship between P2P file-sharing and CD purchases in Canada. “We find no direct evidence to suggest that the net effect of P2P file-sharing on CD purchasing is either positive or negative for Canada as a whole,” note the researchers.
• Among the Canadian P2P file-sharing subpopulation, they found a strong positive relationship between P2P file-sharing and CD purchasing. Among Canadians actually engaged in it, P2P file-sharers buy more CDs.
• They found no clear relationship between file-sharing and legal online downloads. “It is difficult to conclude what is the net effect of P2P file-sharing on purchases of electronically-delivered music,” notes the report.
• People who purchase paid electronically-delivered music are not less likely to purchase music in traditional markets (CD albums). However, people who also own an MP3 player appear to be less likely to purchase CD albums.