Three essays on the industrial organization and political economy of print media

This dissertation comprises three essays on the industrial organization and political economy of print media. The first, “What\u27s Fit to Print: The Effect of Ownership Concentration on Product Variety in Daily Newspaper Markets,” considers supply-side determinants of product position, product variety, and readership in markets for daily newspapers. Using information on reporter assignments across topical beats from 1993–1999, results show that both differentiation and variety increase with ownership concentration. Moreover, there is evidence that this additional variety increases readership, suggesting that concentration benefits consumers. The second essay, “Who Benefits Whom in Daily Newspaper Markets?” considers the influence of demand-side factors on newspaper targeting and newspaper readership. With fixed costs, differentiated product markets deliver only products desired by groups large enough to cover fixed investments. When consumers share similar preferences, additional consumers will bring forth more or better products. Consumers thus confer positive pecuniary “preference externalities” on each other. When preferences differ across groups, consumers can harm each other through product markets. Using zip code-level data on U.S. newspaper sales, this essay documents the pattern of preference externalities among black and white consumers of daily newspapers. The paper shows that product positioning provides the mechanism through which groups benefit or harm each other in newspaper markets. The first two essays document how the industrial organization of newspaper markets affects newspaper content and newspaper readership. The third essay, “Political Externalities of Media Consumption: The Effect of National Newspapers on Local Political Participation,” considers how print media markets can affect behavior beyond straightforward newspaper consumption. Using the New York Times as an example of a national product targeted at readers with distinct tastes, the paper examines how Times penetration in local markets affects local newspaper circulation and local political participation. Results show that as the Times becomes more widely available, per capita sales of local newspapers among targeted readers declines. Moreover, targeted readers are less likely to vote in local elections in areas with greater Times penetration relative to areas with lower penetration. The results indicate that media do affect local political behavior, suggesting that technologies enabling inexpensive distribution of content to dispersed consumers bring costs as well as benefits to local markets