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The impact of the regulation of the cable television industry: the effect on quality-adjusted cable television prices

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Between the mid-1980s and early 1990s, cable television rates increased substantially. Simple price comparisons over the regulated and deregulated eras are difficult as the programming changed simultaneously. Using a modified hedonic framework to allow for the lack of competition on the supply side of the industry, this paper imputes the price for regulation era cable packages using consumers' estimated willingness to pay for individual satellite networks during the unregulated period. Then a 'quality adjusted' price for the cable package offered in 1985 is estimated. On average, regulation benefited consumers by keeping prices below monopolist's profit maximizing price.

Document Type: Research Article


Publication date: 2004-05-01

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