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Newspaper Differentiation and Investments in Journalism: The Role of Tax Policy

  • Kind, Hans Jarle


    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Schjelderup, Guttorm


    (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)

  • Stähler, Frank


    (Dept. of Economics and Business Administration , University of Würzburg)

Newspapers are considered to be important providers of information, culture and language, and are taxed at a reduced VAT rate in most countries. This paper shows that such a policy may affect newspaper di¤erentiation and lead to greater media bias. We further show that a reduced-rate VAT scheme may lead to higher newspaper prices and less investment in journalism. These results are obtained by explicitly taking into account the fact that newspapers operate in two sided markets, where they raise revenue both from readers and advertisers.

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Paper provided by Department of Business and Management Science, Norwegian School of Economics in its series Discussion Papers with number 2009/12.

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Length: 20 pages
Date of creation: 11 Nov 2009
Date of revision:
Handle: RePEc:hhs:nhhfms:2009_012
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NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway

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Fax: +47 55 95 96 50
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