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

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

Abstract

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.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:iepoli:v:23:y:2011:i:3:p:281-286
    DOI: 10.1016/j.infoecopol.2011.08.002
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    References listed on IDEAS

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    Cited by:

    1. Garcia Pires, Armando J., 2014. "Media diversity, advertising, and adaptation of news to readers’ political preferences," Information Economics and Policy, Elsevier, vol. 28(C), pages 28-38.
    2. Martin A. Leroch, 2015. "Press Subsidies and Information in a Democratic Society," Working Papers 1508, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.

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