October 8, 2008
DTV Coupon Program Mainly Benefits Retailers, not Consumers
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TPI vice president for research and senior fellow Scott Wallsten finds in a new paper that the government's DTV coupon program has increased the price of digital-to-analog converter boxes by $21-$34, meaning that the subsidy is primarily benefiting retailers rather than consumers. The $40 coupons made available to all households means that consumers pay $0 for any retail price less than $40 for eligible boxes, thus diminishing price competition among retailers. Given the increase in prices, the coupon program may not provide much additional incentive for consumers to purchase converter boxes.
The Technology Policy Institute
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