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Who Wants You When You're Old and Poor? Exploring the Economics of Media Pricing


  • Martin Koschat
  • William Putsis


This article explores the underlying causes and implications of the relationship between the demographics of a magazine's readership base and its advertising rates. The analysis generates three central insights. First, not unexpectedly, magazines with a disproportionate fraction of readers who are young or affluent or both command a significant premium over other magazines of comparable size. Second, the magnitude of the premium paid for magazines with a disproportionate fraction of young or affluent or both readers is so large that it cannot solely be explained by standard economic explanations of media valuation. Third, if the size and demographic composition of a magazine's readership has a significant impact on a magazine's revenue stream, then there is an economic incentive to skew editorial content to readers that are more "valuable" to advertisers. This article provides some empirical evidence of the strength of these influences.

Suggested Citation

  • Martin Koschat & William Putsis, 2000. "Who Wants You When You're Old and Poor? Exploring the Economics of Media Pricing," Journal of Media Economics, Taylor & Francis Journals, vol. 13(4), pages 215-232.
  • Handle: RePEc:taf:jmedec:v:13:y:2000:i:4:p:215-232 DOI: 10.1207/S15327736ME1304_2

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    References listed on IDEAS

    1. Jeffrey K. MacKie-Mason & Hal Varian, 1994. "Economic FAQs About the Internet," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 75-96, Summer.
    2. Shenker, Scott & Clark, David & Estrin, Deborah & Herzog, Shai, 1996. "Pricing in computer networks: Reshaping the research agenda," Telecommunications Policy, Elsevier, vol. 20(3), pages 183-201, April.
    3. Bodnar & Peter Dilworth & Salvatore Iacono, Judith, 1988. "Cross-sectional analysis of residential telephone subscription in Canada," Information Economics and Policy, Elsevier, vol. 3(4), pages 355-378.
    4. MacKie-Mason, J.K. & Varian, H.L., 1993. "Some Economists of the Internet," Papers 93-16, Michigan - Center for Research on Economic & Social Theory.
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    Cited by:

    1. Susanne Kremhelmer & Hans Zenger, 2004. "Advertising and the Media," Industrial Organization 0403003, EconWPA.

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