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Title: Markets and linguistic diversity

Author(s): Ramon Caminal

Publication Date: December 2009

Keyword(s): language, product variety and translation

Programme Area(s): Industrial Organization

Abstract: Producers of cultural goods and media products can only make their specific contents available to their audiences and readerships through a particular language. The choice of language is a trivial decision if consumers are monolingual. However, the fraction of bilingual consumers is high in some areas and rising everywhere because of the rapid expansion of English as a second language. In this paper I argue that, independently of the gains associated with the use of a lingua franca, the very existence of bilingual consumers may seriously bias market outcomes against minority languages. In particular, I show that the level of linguistic diversity determined by profit maximizing firms tends to be inefficiently low, except when and where the cost of producing a second linguistic version becomes sufficiently low. Thus, the model provides an efficiency argument supporting policies that protect minority languages in these markets.

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Bibliographic Reference

Caminal, R. 2009. 'Markets and linguistic diversity'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7587