Market Size, Preference Externalities, and the Availability of Foreign Language.pdf

Market Size and Preference Externalities in Foreign Language Radio 1 Market Size, Preference Externalities, and the Availability of Foreign Language Radio Programming in the U.S. Xiaofei Wang (wangxf@) Peking University HSBC School of Business Nanshan District Shenzhen, China 510085 and David Waterman (waterman@) Dept. of Telecommunications Indiana University 1229 E. 7th St. Bloomington, IN 47405 Aug 23, 2009 Market Size and Preference Externalities in Foreign Language Radio 2 Abstract Using data for 320 radio stations operating in the 50 largest Arbitron Metro Radio Markets during 2004 that offered at least some programming in one or more of 19 different foreign languages, we find strongly positive statistical relationships between the size of foreign language populations in the radio market and the amount of radio programming in their respective language that is available. We also find a preference externality effect: consistently negative relationships between the amount of foreign language programming available and size of the English language population. Generally, foreign language programming availability increases at a decreasing rate as foreign language populations grow. We find similar results for another measure of radio programming variety, the number of foreign language formats per market; and for a measure of programming quality, the percentage of news/talk programming that is locally produced. Conventional wisdom that minority populations tend to be ‘underserved” by media is generally supported. Market Size and Preference Externalities in Foreign Language Radio 3 Introduction and Background In a 2003 study, Waldfogel finds evidence of “preference externalities” involving black- oriented and Hispanic-oriented radio programming; th