Cultural quotas in broadcasting II: policyANUCBE School of Economics Working Papers from Australian National University, College of Business and Economics, School of Economics 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 JEL-codes: L59 L82 Z10 (search for similar items in EconPapers) Downloads: (external link) Related works: Access Statistics for this paper More papers in ANUCBE School of Economics Working Papers from Australian National University, College of Business and Economics, School of Economics |
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