What Drives Media Bias? New Evidence From Recent Newspaper Closures

Cagdas Agirdas

Journal of Media Economics, 2015, vol. 28, issue 3, 123-141

Abstract: With the advent of the Internet, many U.S. metropolitan areas have seen newspaper closures due to declining revenues. This provides the researcher with an opportunity to analyze the microeconomic sources of media bias. This article uses a large panel dataset of newspaper archives for 99 newspapers over 240 months (1990-2009). The author found that, after controlling for the unemployment rate, the change in unemployment rate, and the political preferences of surrounding metropolitan area, conservative newspapers report 17.4% more unemployment news when the President is a Democrat rather than a Republican, before the closure of a rival newspaper in the same media market. This effect is 12.8% for liberal newspapers. After the closure, these numbers are 3.5% and 1.1%, respectively. This moderation of media bias after closure of a rival newspaper is robust to the inclusion of newspaper size, newspaper fixed-effects or metropolitan area fixed-effects as controls. The author also found that newspapers in smaller metropolitan areas have a larger moderation in their bias. Findings provide support for theories in which media bias is demand-driven, as surviving newspapers aim to increase their sales by gaining the former readers of a closed newspaper in the same media market.

Date: 2015
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DOI: 10.1080/08997764.2015.1063499

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