The economics of maps

I have always liked maps. When I was growing up, one of my favourite books was my Rand McNally atlas. I may even still have it, tucked away with its spine held together by masking tape (after years of overuse by my primary-school-aged self). When I'm reading some fantasy novel that has a map on the inside cover, I can find myself lost in the map before even getting to read the book, and then flicking back to the map any time some new location is mentioned. Right next to my laptop while I'm writing this is a sepia-toned desk globe than, in truth, takes up too much space on the desk but will not be foregone.

Given my interest in maps, I've been planning to read this 2020 article by Abhishek Nagaraj (University of California at Berkeley) and Scott Stern (MIT), published in the Journal of Economic Perspectives (open access), for some time (like many articles that have sat in my digital to-be-read pile for a long time). Nagaraj and Stern explain the economics of maps. This isn't the economics that uses maps, such as in the field of economic geography, but two other aspects. First, they review the economic and social consequences of maps. Second, they review the economics of mapmaking. Most of the article is devoted to the latter, and that's what I want to focus on as well.

First though, what is a map? In my classes, I use maps as an example of a model - an abstraction or simplification of reality. Nagaraj and Stern note that maps are composed of two elements: (1) spatial data; and (2) a design. As they explain:

At its core, a map takes selected attributes attached to a specific positional indicator (spatial data) and pairs it with a graphical illustration or visualization (design)...

Having separated a map into its constituent elements, Nagaraj and Stern then look at the economics of spatial data, and the economics of design. On data, they note that:

...mapping data is in many respects a classical public good. Almost by definition, mapping data is non-rival insofar as the use of data for a map by any one person does not preclude its use by others; moreover, the information underlying a given database is non-excludable because copyright law does not protect the copying of factual information. While the precise expression included within a database can be protected through copyright, the underlying geographical facts reflected in the database cannot be protected.

And just like most other public goods:

The combination of non-rivalry and non-excludability of mapping data makes its production prone to private underinvestment, providing a rationale for government support. Indeed, many of the most widely used maps rely on publicly funded geospatial data, including US Geological Survey topographical maps, Census demographic information, and local land-use and zoning maps.

On the other hand:

...there are important cases where mapping data is in fact excludable, either through secrecy or contract... Mapping data that allows for excludability exhibits properties more akin to a club good than a traditional public good. Specifically, the significant fixed costs of data collection combined with relatively cheap reproducibility creates entry barriers that supports natural monopolies or oligopolistic competition. It may be efficient for only a single firm to engage in data collection and for the industry to simply license these data (under agreed-upon contractual terms) from this monopoly provider.

Now, even when spatial data is protected and excludable:

...in the absence of perfect price discrimination, private entities may only provide mapping data at a high price (relative to near-zero marginal cost), reducing efficient access. Beyond pricing, the private provision of mapping data may additionally be concentrated in locations with high demand (such as urban areas) to the exclusion of less concentrated regions.

And that all accords with what we see. There are free sources of spatial data, which are public goods supported by governments or universities, alongside proprietary spatial databases that are club goods and only available at relatively high cost (to the dismay of researchers such as me!).

Turning to map designs, Nagaraj and Stern note that:

Like data, designs are also a knowledge good in that multiple individuals can use a particular map design (and so a design is non-rival) and the degree of excludability for a given design may vary with the institutional and intellectual property environment. With that said, a striking feature of a map design is that, almost by construction, a map is created for the purpose of visual inspection, and it is much easier to copy than a database (which might be protected by secrecy or contract). One consequence of this is that there may be underinvestment in high-quality and distinct designs for a given body of geospatial data.

They use this to explain why there is a lot of competition in the provision of map designs, which is why so many maps for particular purposes look the same. As Nagaraj and Stern explain:

A potential consequence of the non-excludability of mapping data and designs is inefficient overproduction of mapping products that compete with each other. Once a given map is produced for a particular location and application (say, a city-level tourist map), copycat maps can be produced at a lower sunk cost; because demand for maps of a given quality and granularity is largely fixed, free entry based on a given map involves significant business-stealing...

Taking both spatial data and map designs together, the role of intellectual property protection is important:

On the one hand, an absence of formal intellectual property protection leads to underinvestment in mapping data and high-quality map design, but inefficient entry by copycat mapmakers. On the other hand, a high level of formal intellectual property protection can shift the basis of competition away from imitation and towards duplicative investment. For example, over the past two decades, no less than four different organizations—including Google Street View, Microsoft StreetSide, OpenStreetCam project, and TomTom—have undertaken comprehensive and qualitatively similar initiatives to gather street-level imagery and mapping coordinates for the entire US surface road system.

So that explains why there are multiple Street View clones available. The firms are over-investing in goods that are protected by intellectual property. Do we really need multiple copycats of Google Street View? Also, in terms of intellectual property protection, I found this interesting:

In addition to employing copyright, firms often invest in additional strategies to protect their intellectual property. In particular, mapmakers have devised the idea of inserting fictional “paper towns” or “trap streets” in maps... This strategy allows them to detect rivals who might copy their data (rather than collecting similar data through an original survey) and thereby protect costly investment in original data collection. Such strategies are commonly deployed by mapmakers to this day for factual data...

Does that help to explain why people have been caught out following roads that don't exist, or trying to find towns that are misplaced? I guess that 'trap streets' or 'paper towns' are a good idea on a paper map, which requires a certain amount of attention to follow, but less suitable for digital maps that people follow blindly.

Nagaraj and Stern's article opens our eyes to the economics of maps, as well as their consequences. And now, I'm going to search my garage for my beloved Rand McNally atlas. If only I had a map to guide me as to where it is hiding!