TY  - JOUR
AU  - Gentzkow, Matthew
AU  - Shapiro, Jesse M
AU  - Sinkinson, Michael
TI  - Competition and Ideological Diversity: Historical Evidence from US Newspapers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18234
PY  - 2012
Y2  - July 2012
DO  - 10.3386/w18234
UR  - http://www.nber.org/papers/w18234
L1  - http://www.nber.org/papers/w18234.pdf
N1  - Author contact info:
Matthew Gentzkow
Department of Economics
Stanford University
579 Jane Stanford Way
Stanford, CA 94305
Tel: 650/723-3721
Fax: 650/725-5702
E-Mail: gentzkow@stanford.edu

Jesse M. Shapiro
Economics Department
Box B
Brown University
Providence, RI 02912
Tel: 401/863-2970
E-Mail: jesse_shapiro_1@brown.edu

Michael Sinkinson
Yale School of Management
165 Whitney Ave, Suite 3473
New Haven, CT 06511
E-Mail: michael.sinkinson@yale.edu
M2  - featured in NBER digest on 2012-10-25
AB  - We study the competitive forces that 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.
ER  -