Competition and Ideological Diversity: Historical Evidence from US Newspapers

Matthew Gentzkow, Jesse Shapiro and Michael Sinkinson

American Economic Review, 2014, vol. 104, issue 10, 3073-3114

Abstract: We study the competitive forces which shaped ideological diversity in the US press in the early twentieth century. We find that households preferred like-minded news and that newspapers used their political orientation to differentiate from competitors. We formulate a model of newspaper demand, entry, and political affiliation choice in which newspapers compete for both readers and advertisers. We use a combination of estimation and calibration to identify the model's parameters from novel data on newspaper circulation, costs, and revenues. The estimated model implies that competition enhances ideological diversity, that the market undersupplies diversity, and that optimal competition policy requires accounting for the two-sidedness of the news market.

JEL-codes: D72 K21 L13 L41 L82 N42 N72 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.10.3073
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Citations: View citations in EconPapers (120)

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Working Paper: Competition and Ideological Diversity: Historical Evidence from US Newspapers (2012)
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