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Saving newspapers with public grants – The effects of press subsidies on the provision of journalistic quality

  • Leroch, Martin A.
  • Wellbrock, Christian M.

Many European governments subsidize their newspapers with the intention to guaranteeing high journalistic quality. Since journalistic quality is not defined by consumer preferences, increasing will not necessarily lead to benefits for all consumers. Based on this idea, the demand for a regional newspaper monopolist is modeled and the profit maximizing level of journalistic quality is analysed. We find that frequently used sales subsidies may be counter-productive as they can lead the newspaper to reduce journalistic quality.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167624511000321
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Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 23 (2011)
Issue (Month): 3 ()
Pages: 281-286

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Handle: RePEc:eee:iepoli:v:23:y:2011:i:3:p:281-286
DOI: 10.1016/j.infoecopol.2011.08.002
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505549

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  8. Acharyya, Rajat, 1998. "Monopoly and product quality: Separating or pooling menu?," Economics Letters, Elsevier, vol. 61(2), pages 187-194, November.
  9. Victor Ginsburgh & Luc Champarnaud & Philippe Michel, 2008. "Can public arts education replace arts subsidization?," ULB Institutional Repository 2013/13396, ULB -- Universite Libre de Bruxelles.
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