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The Impact of Online Competition on Local Newspapers: Evidence from the Introduction of Craigslist

Author

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  • Milena Djourelova
  • Ruben Durante
  • Gregory J. Martin

Abstract

How does competition from online platforms affect the organization, performance, and editorial choices of newspapers? What are the implications of these changes for the information voters are exposed to and for their political choices? We study these questions using the staggered introduction of Craigslist—the world’s largest online platform for classified advertising — across US counties between 1995 and 2009. This setting allows us to separate the effect of competition for classified advertising from other changes brought about by the Internet, and to compare newspapers that relied more or less heavily on classified ads ex ante. We find that, following the entry of Craigslist, local newspapers reliant on classified ads experienced a significant decline in the number of management and newsroom staff, including in the number of editors covering politics. These organizational changes led to a reduction in news coverage of politics and resulted in a decline in newspaper readership, particularly among readers with high political interest. Finally, we document that reduced exposure to local political news was associated with an increase in partisan voting and increased entry and success of ideologically extreme candidates in congressional elections. Taken together, our findings shed light on the determinants of the decline of print media and on its broader implications for democratic politics.

Suggested Citation

  • Milena Djourelova & Ruben Durante & Gregory J. Martin, 2021. "The Impact of Online Competition on Local Newspapers: Evidence from the Introduction of Craigslist," CESifo Working Paper Series 9090, CESifo.
    • Handle: RePEc:ces:ceswps:_9090
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    1. Charles Angelucci & Julia Cagé & Michael Sinkinson, 2024. "Media Competition and News Diets," American Economic Journal: Microeconomics, American Economic Association, vol. 16(2), pages 62-102, May.
    2. Balles, Patrick & Matter, Ulrich & Stutzer, Alois, 2023. "Television market size and political accountability in the U.S. House of Representatives," European Journal of Political Economy, Elsevier, vol. 80(C).
    3. Ruben Durante & Andrea Fabiani & Luc Laeven & José-Luis Peydró, 2021. "Media capture by banks," Economics Working Papers 1817, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2022.
    4. Philine Widmer & Sergio Galletta & Elliott Ash, 2022. "Media Slant is Contagious," Papers 2202.07269, arXiv.org, revised Apr 2023.
    5. Garz, Marcel & Szucs, Ferenc, 2023. "Algorithmic selection and supply of political news on Facebook," Information Economics and Policy, Elsevier, vol. 62(C).

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    More about this item

    Keywords

    newspapers; internet; advertising; ideological polarization;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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