Researchers from Harvard University and the University of Kansas claim that the effect of pirate peer-to-peer file sharing networks on music industry sales "are indistinguishable from zero" in a report they published this month.

The report, published in the February Journal of Political Economy, finds that illegal downloads impacted physical CD sales only 0.7%. The study compared the download activity from various P2P services in the last four months of 2002 and compared them to Nielsen SoundScan data, tracking a total of 1.75 million downloads from 680 albums.

The music industry has pointed to piracy as the primary reason behind the ongoing decline in CD sales. In 2002, for instance, about 803 million CDs were sold, 80 million less than the prior year. But according to the study's authors, only 6 million of that shortfall can be attributed to piracy.

The full report can be accessed here (subscription required).