Newspapers and Advertising: The Effects of Ad-Valorem Taxation under Duopoly

Hans Jarle Kind (), Guttorm Schjelderup () and Frank Stähler ()

No CESifo Working Paper No. 1891, CESifo Working Paper Series from CESifo Group Munich

Abstract: Newspapers are two-sided platforms that sell their product both to readers and advertisers. Media firms in general, and newspapers in particular, are considered important providers of information, culture and language in most countries. Newspapers are therefore given preferential tax treatment. We show that lower ad valorem taxes lead newspapers to become more differentiated. Thereby the competitive pressure falls, possibly resulting in higher newspaper prices and reduced quality investments.

Keywords: two-sided markets; ad-valorem taxes (search for similar items in EconPapers)
JEL-codes: D40 D43 H21 H22 L13 (search for similar items in EconPapers)
Date: 2007
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Working Paper: Newspapers and Advertising: The Effects of Ad-Valorem Taxation under Duopoly (2007)
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