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The Impact of the 1992 Cable Act on Household Demand and Welfare

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  • Gregory S. Crawford

Abstract

I measure the benefit to households of the 1992 Cable Act in light of strategic responses by cable systems to the regulations mandated by the act. A discrete-choice differentiated-product model of household demand for all offered cable television services forms the basis of the analysis. Aggregation over households and service combinations to the level of the data permits estimation on a cross-section of cable markets from before and after the act. The results indicate that while the regulations mandated price reductions of 10-17% for cable services, observed system responses yielded no change in household welfare. Post-act changes in cable prices are responsible for most of the difference.

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Bibliographic Info

Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 31 (2000)
Issue (Month): 3 (Autumn)
Pages: 422-450

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Handle: RePEc:rje:randje:v:31:y:2000:i:autumn:p:422-450

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Cited by:
  1. Anderson, Simon P & Gabszewicz, Jean Jaskold, 2005. "The Media and Advertising: A Tale of Two-Sided Markets," CEPR Discussion Papers 5223, C.E.P.R. Discussion Papers.
  2. Yasuji Otsuka & Bradley Braun, 2003. "Price Cap Regulation in the Cable Television Industry: Why was the Demand Stagnant?," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 41-55, March.
  3. Gregory S. Crawford & Ali Yurukoglu, 2012. "The Welfare Effects of Bundling in Multichannel Television Markets," American Economic Review, American Economic Association, vol. 102(2), pages 643-85, April.
  4. GINSBURGH, Victor & ZANG, Israel, 2005. "Bundling by competitors and the sharing of profits," CORE Discussion Papers 2005007, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Mariuzzo, Franco & Walsh, Patrick Paul & Whelan, Ciara, 2010. "Coverage of retail stores and discrete choice models of demand: Estimating price elasticities and welfare effects," International Journal of Industrial Organization, Elsevier, vol. 28(5), pages 555-578, September.
  6. Kyoo il Kim & Amil Petrin, 2013. "Tests for Price Endogeneity in Differentiated Product Models," NBER Working Papers 19011, National Bureau of Economic Research, Inc.
  7. Mary T. Kelly & John S. Ying, 2013. "Testing the Effectiveness of Regulation and Competition on Cable Television Rates," Working Papers 13-06, University of Delaware, Department of Economics.
  8. Mary T. Kelly & John S. Ying, 2009. "Testing the Effectiveness of Regulation and Competition on Cable Television Rates," Villanova School of Business Department of Economics and Statistics Working Paper Series 3, Villanova School of Business Department of Economics and Statistics.
  9. Anja Lambrecht & Katja Seim & Naufel Vilcassim & Amar Cheema & Yuxin Chen & Gregory Crawford & Kartik Hosanagar & Raghuram Iyengar & Oded Koenigsberg & Robin Lee & Eugenio Miravete & Ozge Sahin, 2012. "Price discrimination in service industries," Marketing Letters, Springer, vol. 23(2), pages 423-438, June.
  10. Savage, Scott James & Waldman, Donald M., 2009. "Ability, location and household demand for Internet bandwidth," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 166-174, March.

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