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Does Conflict of Interest Lead to Biased Coverage? Evidence from Movie Reviews

Stefano DellaVigna () and Johannes Hermle

Review of Economic Studies, 2017, vol. 84, issue 4, 1510-1550

Abstract: Media outlets are increasingly owned by conglomerates, inducing a conflict of interest: a media outlet can bias its coverage to benefit companies in the same group. We test for bias by examining movie reviews in media outlets owned by News Corp, such as the Wall Street Journal, and Time Warner, such as Time. We find higher ratings for 20th Century Fox movies in News Corp. outlets compared to movies by other studios. To disentangle bias from correlation of taste, we introduce and validate a novel matching procedure using individual movie ratings from online platforms. Using this procedure, we find no evidence of bias in News Corp. nor Time Warner outlets. We reject even small effects, such as bias of one extra star (out of four) every thirteen movies. We test for differential bias when the return to bias is plausibly higher, examine bias by media outlet and by journalist, as well as editorial bias. We also consider bias by omission—whether media outlets are more likely to review highly-rated movies by affiliated studios—and conflict of interest within a movie aggregator. In none of these dimensions do we find evidence of bias. We relate to previous work and discuss three explanations for the lack of bias in our setting: high values of media reputation, organizational features in a conglomerate, and low returns to bias.

Keywords: Media Economics; Bias; Conflict of Interest; Conglomerates (search for similar items in EconPapers)
JEL-codes: D8 L82 (search for similar items in EconPapers)
Date: 2017
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Working Paper: Does Conflict of Interest Lead to Biased Coverage? Evidence from Movie Reviews (2014) Downloads
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