Canadian Content Laws and Programming Diversity

By law, 50 percent of private Canadian television broadcasters' programming must be Canadian. The author proposes that the laws promote one mandate of broadcasting policy by increasing programming diversity. The quotas induce substitution out of the dominant category and into other categories, in response to differential costs and revenues between domestic and imported programming. To test the hypothesis, profit maximizing programming that would exist without the regulations is simulated.and compared to observed programming. Herfindahl indices (calculated for predicted and observed programming, across stations, and across time), indicate that under some assumptions of broadcaster behavior, diversity across stations is higher with the content laws than without.