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The Rise and Rise of Cable TV: Demand elasticity of cable television during the Great Recession
Unformatted Document Text:  CABLE SUBSCRPITIONS this study only looked at a comparison of economic disparity with Cable/ADS penetration. Therefore unemployment rates were chosen as the representative variable for comparison between the DMAs. The state of unemployment is the main variable discussed by the PIH, as it is directly related to household income (Christ, 1963). The Cable/ADS penetration data was collected from the Television Bureau of Advertising, which is reported on a quarterly basis (2006-209). Data were available from the following months, as they are sweeps months: February, May, July and November (Television Bureau of Advertising, 2010). The data were categorized according to DMA and then the means for recession-weak and recession-strong Cable/ADS penetration rates were calculated for the period of recession and the time preceding it (Table 2). Population for each DMA was also controlled. To test H2, the Cable/ADS penetration and unemployment means were both used as variables in the formula to measure demand elasticity. The following formula was used to calculate the elasticity of demand: η = % ∆ Q/% ∆ P (Hoskins, McFadyen, & Finn, 2004), where Q = Cable/ADS penetration mean, and P = DMA unemployment mean (Table 3). Cable/ADS services were assigned “Q” as it represents the quantity of services provided. Unemployment was assigned “P” as price is representative of value and the raising of this value is what ultimately determines elasticity, or lack thereof. Under this formula, if the resulting coefficient is more than one, the measured demand is elastic and, if less than one, is inelastic. The elasticity of demand was calculated in both recession-weak and recession-strong DMA’s in order to compare the data from the recession to a more recent, stable economic period. 8

Authors: Danelo, Matthew.
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CABLE SUBSCRPITIONS
this study only looked at a comparison of economic disparity with Cable/ADS penetration. 
Therefore unemployment rates were chosen as the representative variable for comparison 
between the DMAs. The state of 
unemployment is the main variable discussed by the PIH, as it 
is directly related to household income (Christ, 1963).
The Cable/ADS penetration data was collected from the Television Bureau of 
Advertising, which is reported on a quarterly basis (2006-209). Data were available from the 
following months, as they are sweeps months: February, May, July and November (Television 
Bureau of Advertising, 2010). The data were categorized according to DMA and then the means 
for recession-weak and recession-strong Cable/ADS penetration rates were calculated for the 
period of recession and the time preceding it (Table 2). Population for each DMA was also 
controlled.
To test H2, the Cable/ADS penetration and unemployment means were both used as 
variables in the formula to measure demand elasticity. The following formula was used to 
calculate the elasticity of demand: 
η
 = %
Q/%
P (Hoskins, McFadyen, & Finn, 2004), where Q 
= Cable/ADS penetration mean, and P = DMA unemployment mean (Table 3). Cable/ADS 
services were assigned “Q” as it represents the quantity of services provided. Unemployment 
was assigned “P” as price is representative of value and the raising of this value is what 
ultimately determines elasticity, or lack thereof. Under this formula, if the resulting coefficient is 
more than one, the measured demand is elastic and, if less than one, is inelastic.  The elasticity of 
demand was calculated in both recession-weak and recession-strong DMA’s in order to compare 
the data from the recession to a more recent, stable economic period.
8


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