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Newspapers and public grants: A matter of quality

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  • Maria Rosa Battaggion
  • Alessandro Vaglio

Abstract

The present paper deals with the issue of newspaper subsidies in a framework of endogenous quality provision. We compare monopoly and duopoly cases in a vertically differentiated model. For monopolies we show that a per†copy subsidy reduces quality. Conversely, in duopolies in the vertically differentiated model, we show that a state subsidy might increase the quality of the low†quality newspaper and decrease the quality of the high†quality newspaper.

Suggested Citation

  • Maria Rosa Battaggion & Alessandro Vaglio, 2018. "Newspapers and public grants: A matter of quality," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(1), pages 27-38, February.
    • Handle: RePEc:bla:scotjp:v:65:y:2018:i:1:p:27-38
    DOI: 10.1111/sjpe.12152
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    References listed on IDEAS

    as
    1. Maria Rosa Battaggion & Alessandro Vaglio, 2012. "The Market for News: A Demand-Oriented Analysis," Economia politica, Società editrice il Mulino, issue 1, pages 81-110.
    2. Rennhoff, Adam D. & Wilbur, Kenneth C., 2012. "Local media ownership and media quality," Information Economics and Policy, Elsevier, vol. 24(3), pages 231-242.
    3. Mark Armstrong & Helen Weeds, 2005. "Public Service Broadcasting in the Digital World," Industrial Organization 0507010, University Library of Munich, Germany.
    4. Leroch, Martin A. & Wellbrock, Christian M., 2011. "Saving newspapers with public grants – The effects of press subsidies on the provision of journalistic quality," Information Economics and Policy, Elsevier, vol. 23(3), pages 281-286.
    5. Kind, Hans Jarle & Møen, Jarle, 2014. "Effects of taxes and subsidies on media services," Discussion Papers 2014/44, Norwegian School of Economics, Department of Business and Management Science.
    6. Miguel González-Maestre & Francisco Martínez-Sánchez, 2015. "Quality choice and advertising regulation in broadcasting markets," Journal of Economics, Springer, vol. 114(2), pages 107-126, March.
    7. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
    8. Mark Armstrong, 2005. "Public service broadcasting," Fiscal Studies, Institute for Fiscal Studies, vol. 26(3), pages 281-299, September.
    9. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    10. Strömberg, David & Prat, Andrea, 2011. "The Political Economy of Mass Media," CEPR Discussion Papers 8246, C.E.P.R. Discussion Papers.
    11. Miguel González-Maestre & Francisco Martínez-Sánchez, 2014. "The role of platform quality and publicly owned platforms in the free-to-air broadcasting industry," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(1), pages 105-124, March.
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    Cited by:

    1. Maria Rosa Battaggion & Alessandro Vaglio, 2020. "Advertising Caps and News Quality," Economics Bulletin, AccessEcon, vol. 40(1), pages 117-127.
    2. Marcel Garz & Jonna Rickardsson, 2023. "Ownership and media slant: Evidence from Swedish newspapers," Kyklos, Wiley Blackwell, vol. 76(1), pages 18-40, February.

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