Discrimination and Media Diversity: Historical Evidence from U.S. Radio Stations

Abstract

This paper examines the role racial discrimination plays in the positioning of radio stations in the post-war Jim Crow era. I construct a novel, comprehensive dataset of all commercial radio stations across the U.S., including station-level financial information and black-oriented programming hours, at the start of minority programming in broadcast media. By comparing profitability of black-oriented and other radio stations, I show that black-oriented stations were significantly more profitable than other stations in the same market. In addition, higher profits are correlated with higher levels of black-oriented programming. The profitability of this new format is shown to be correlated with local measures of racism. Using a theoretical framework with endogenous product choice, I show that the empirical results provide evidence for firm owner discrimination, consistent with an underprovision of content for minorities.