NATIONAL TELEVISION AND THE MARKET FOR LOCAL PRODUCTS: THE CASE OF BEER

Authors


  • *I wish to thank the Editor and an anonymous referee for thoughtful comments. I also thank Carol Tremblay and Victor Tremblay for providing data on beer production. This work was supported in part by a grant from the City University of New York PSC-CUNY Research Award Program.

Abstract

Information technology lowers the cost of distributing information to dispersed consumers. Because national firms reap larger benefits from new media than firms serving only local consumers, media innovations may reduce the market for local products. This paper considers the effect of television on the market for local beer. Using market-level data on television penetration, local breweries and brewery production from 1945–1960, results show that increases in television penetration are associated with fewer local breweries and less local beer production. The results indicate that the industrial organization of media markets can affect the structure of markets for local products.

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