Television Advertising Regulation and Program Quality

Donald Wright

The Economic Record, 1994, vol. 70, issue 211, 361-367

Abstract: In many countries, including Australia and the United Kingdom, there are regulations that limit the amount of advertising content per hour of television broadcasts. This paper examines the effect this regulation has on program quality and viewer welfare. It is shown that regulation can reduce program quality and that its effect on viewer welfare is ambiguous. In some circumstances fostering competition can both reduce the number of advertisements per unit of time and increase program quality. Therefore, depending on the parameters of the model, fostering competition may be preferrable to regulating the amount of advertisements per unit of time.

Date: 1994
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