The DTV Coupon Program : A Boon to Retailers, Not Consumers

This paper empirically investigates the effects of the $1.5 billion program Congress established to subsidize digital-to-analog converter boxes to help consumers transition to digital television broadcasts. The results show that the DTV coupon program has increased the price of digital-to-analog converter boxes by $21-$34, meaning that the subsidy is primarily benefiting retailers rather than consumers. The $40 coupons made available to all households means that consumers pay $0 for any retail price less than $40 for eligible boxes, thus diminishing price competition among retailers