Is radio advertising a distinct local market? An empirical analysis

The recent relaxation of regulations limiting the ability of an entity to o wn multiple radio stations has led to a dramatic increase in ownership conc entration in local radio markets. As a result, the Department of Justice ha s, on several occasions, required limited divestiture of multiple station o wners. Implicit in the agency's action is that radio advertising constitute s an antitrust market. Using the framework established by the Merger Guidel ines, this paper evaluates whether or not radio advertising is a distinct l ocal market by estimating an own-price elasticity of demand for radio adver tising. Our results support the assertion that radio advertising is an anti trust market.