The Welfare Effect Analysis Of Government Regulation Over The Media Industry

The media industry not only takes the social responsibility of the disseminating information, but also has a significant public nature. Governments have attached great importance to the media industry regulation, because it is essential institutional arrangements to the media industry. The different regulation policies that the governments adopt to the media industry will produce various welfare effects. Some government regulation policy will improve the social welfare, while some other regulation policies will reduce the social welfare. Therefore, the welfare effect analysis of government regulation over the media industry has important practical significance for a good grasp of the conditions and scopes where the regulations applies to and the establishment of the efficient and reasonable media market.Based on the theoretical foundation for the welfare economics, this paper discusses three means of regulations over the media industry, including the price regulations, market access regulations, the tax and subsidies regulations. This paper analyzes the three kinds of regulations' influence on the media producers, the media consumers, and the total social welfare, then evaluates the pros and cons of government regulations over the media industry. The conclusions are obtained as follows, the highest price regulation can achieve pareto improvement, and it was an increase of total social welfare. But the lowest price regulation didn't play its role, it not only corrected media market failure, but also brought the total social welfare loss. Likewise, the market access regulations also did not reach the expected purposes, but hindered the media market competition, lowered the total social welfare level. The subsidies regulations have two sides. On one hand , they have certain positive effects to the media consumers, media producers and the total social welfare, and bring many benefits. On the other hand they also caused some negative influence. The tax regulations reduced social demand, and caused a media consumer surplus, made media consumers and producers medium total social welfare loss.Through the analysis of advantages and disadvantages, the paper puts forward the corresponding countermeasures: to break fixed price regulation policies, and establish maximum incentive regulation. In the competitive media market, cancel the lowest price regulation, then introduce the competition. Distinguish monopolistic and competitive business, then carry out different market access regulations. To explore new forms of market access regulation and establish franchise systems. Gradually reduce the direct subsidies regulation, develop the various forms of indirect subsidies regulations. Implement different tax regulations according to the profitability of media industry.