What was the impact of the radio in the 1920s on the economy?

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larrygates's profile pic

larrygates | College Teacher | (Level 1) Educator Emeritus

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The major impact of radio on the economy was that it brought advertising into American homes. In a time before television, the radio was the greatest invention prior to the advent of the internet. It provided a source of entertainment which reached millions of American homes within three years. Although radio programs were entertaining, they had to be paid for; and this brought about the commercial. Everything from aspirin, toothpaste, soft drinks, etc. were advertised on radio. The commercials were a huge success and businesses saw sales of their brand names boom. Thus the effect on the economy of the radio was immense.

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teachersage | (Level 2) Senior Educator

Posted on

Commercial radio came on the scene in 1920 in the United States and had significant effects on the economy. First, it started a whole new industry. Although radios were expensive for that time period, people wanted them, and according to one estimate sales of radios rose from $60 million in 1923 to more than $840 million in 1929. This led to job growth, as people had to be hired to build, package, and ship the radios, and to create the advertising involved in selling all these radios. Further, some people started careers as radio announcers, radio station owners and writers of radio programs, in addition to all the other jobs that supported radio programming.

A second effect on the economy was radio advertising, which helped raise people's desire for consumer goods, and helped the U.S. grow as a consumer economy as the 1920s economic boom roared away. In 1926, the first national radio network, NBC, was born, bringing standardized programming and advertising to the entire country. This helped developed national, rather than regional, economic markets.


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