Chapter 8. Radio

This chapter surveys the literature on the economics of radio, focusing on the broadcast industry in the United States. The first parts of the chapter provide a history of the radio industry and its regulation, and a guide to the data available for empirical research. The next part surveys the large empirical literature analyzing the effects of the wave of consolidation that took place after the Telecommunications Act of 1996, explaining which empirical results appear robust (for example, the effects of local consolidation on programming differentiation) and which remain unclear (for example, the effects of consolidation on advertising prices and quantities). The remaining parts survey the literature on whether there are too many radio stations; the strategies that stations use to boost the effectiveness of advertising; the effects of non-commercial stations on the commercial sector; and the interaction between the radio and music industries, including payola and copyright issues. The chapter emphasizes several topics that seem ripe for additional research.