Richardson, Martin2004-11-302005-03-102011-01-052005-03-102011-01-052004http://hdl.handle.net/1885/42673http://digitalcollections.anu.edu.au/handle/1885/42673This 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.249678 bytes350 bytesapplication/pdfapplication/octet-streamen-AUpublic broadcastinglocal content requirement2004