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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? And what are the implications of these changes for the information vot-ers are exposed to and for political accountability? 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 papers experienced a significant decline in the number of newsroom and management staff. Cuts in editorial staff disproportionately affected reporters covering politics. These organizational changes led to a reduction in news coverage of politics and political corrup-tion, and resulted in a decline in newspaper readership which was not compensated by increased news consumption on other media. Finally, we find some evidence that reduced news coverage of politics was associated with lower voter turnout, and more party-line voting for both citizens and politicians.

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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    Cited by:

    1. Charles Angelucci & Julia Cage & Michael Sinkinson, 2020. "Media Competition and News Diets," Sciences Po publications 2020-03, Sciences Po.
    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. Garz, Marcel & Szucs, Ferenc, 2023. "Algorithmic selection and supply of political news on Facebook," Information Economics and Policy, Elsevier, vol. 62(C).
    4. 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.
    5. repec:hal:spmain:info:hdl:2441/4ec86lkes59hv9tfv77ld1p5fr is not listed on IDEAS
    6. Philine Widmer & Sergio Galletta & Elliott Ash, 2022. "Media Slant is Contagious," Papers 2202.07269, arXiv.org, revised Apr 2023.

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    More about this item

    Keywords

    newspapers; internet; advertising; political accountability;
    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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