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Cultural quotas in broadcasting II: policy

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  • Martin Richardson

Abstract

This paper considers the application of ‘cultural quotas’ to radio broadcasting: a requirement that a minimum percentage of broadcast content be of local origin. Using a Hotelling location model derived in Richardson (2004) we show that, while the laissez-faire solution involves less than (socially optimal) maximal differentiation, a quota reduces the differentiation between the stations even further. While a cultural quota may raise consumer welfare, the reduced station diversity and advertising levels monotonically lower overall social welfare. We consider two other policies – a limit on advertising and a publicly provided non-commercial station – and show that both also reduce diversity, compared to the laissez-faire solution. An advertising cap is not as effective as the quota in achieving greater airplay for local content for least welfare cost but a public station can be, depending on the magnitude of its associated fixed costs

Suggested Citation

  • Martin Richardson, 2004. "Cultural quotas in broadcasting II: policy," ANU Working Papers in Economics and Econometrics 2004-443, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2004-443
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp443.pdf
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    References listed on IDEAS

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    1. repec:crs:wpaper:9972 is not listed on IDEAS
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    Cited by:

    1. Martin Richardson, 2004. "Cultural quotas in broadcasting I: a model," ANU Working Papers in Economics and Econometrics 2004-442, Australian National University, College of Business and Economics, School of Economics.
    2. Perona, Mathieu, 2010. "How Broadcasting Quotas Harm Program Diversity," MPRA Paper 19860, University Library of Munich, Germany.
    3. Claude Crampes & Abraham Hollander, 2008. "The regulation of audiovisual content: quotas and conflicting objectives," Journal of Regulatory Economics, Springer, vol. 34(3), pages 195-219, December.
    4. Nela Filimon & Jordi López-Sintas & Carlos Padrós-Reig, 2011. "A test of Rosen’s and Adler’s theories of superstars," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 35(2), pages 137-161, May.

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    More about this item

    JEL classification:

    • L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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