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Newspapers in Times of Low Advertising Revenues†

Newspapers in Times of Low Advertising Revenues† AbstractWe model the consequences on newspapers’ content and prices of a reduction in advertising revenues. Newspapers choose the size of their newsroom, and readers are heterogeneous in their ideal amount of journalistic-intensive content. We show that a reduction in advertising revenues lowers newspapers’ incentives to produce journalistic-intensive content. We also build a unique dataset on French newspapers between 1960 and 1974 and perform a difference-in-differences analysis exploiting the introduction of advertising on television, which affected national newspapers more severely than local ones. We find robust evidence of a decrease in the amount of journalistic-intensive content produced and the subscription price. (JEL L11, L82, M37) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

Newspapers in Times of Low Advertising Revenues†

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Publisher
American Economic Association
Copyright
Copyright © 2019 © American Economic Association
ISSN
1945-7685
DOI
10.1257/mic.20170306
Publisher site
See Article on Publisher Site

Abstract

AbstractWe model the consequences on newspapers’ content and prices of a reduction in advertising revenues. Newspapers choose the size of their newsroom, and readers are heterogeneous in their ideal amount of journalistic-intensive content. We show that a reduction in advertising revenues lowers newspapers’ incentives to produce journalistic-intensive content. We also build a unique dataset on French newspapers between 1960 and 1974 and perform a difference-in-differences analysis exploiting the introduction of advertising on television, which affected national newspapers more severely than local ones. We find robust evidence of a decrease in the amount of journalistic-intensive content produced and the subscription price. (JEL L11, L82, M37)

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: Aug 1, 2019

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