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Media Bias and Advertising: Evidence from German Car Magazines

Author

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  • Dewenter, Ralf
  • Heimeshoff, Ulrich

Abstract

This paper investigates the existence of a possible media bias by analyzing the impact of automobile manufactures' advertisements on automobile reviews in German car magazines. By accounting for both endogeneity and sample selection we find a positive impact of advertising volumes on test scores. Moreover, also a home bias in terms of higher scores for German cars is observable. We account these results as some evidence for a media bias, induced by the two-sidedness of the markets.

Suggested Citation

  • Dewenter, Ralf & Heimeshoff, Ulrich, 2011. "Media Bias and Advertising: Evidence from German Car Magazines," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48691, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc11:48691
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    File URL: https://www.econstor.eu/bitstream/10419/48691/1/VfS_2011_pid_921.pdf
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    References listed on IDEAS

    as
    1. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    2. Stefano DellaVigna & Ethan Kaplan, 2007. "The Fox News Effect: Media Bias and Voting," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1187-1234.
    3. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    4. Dewenter, Ralf & Haucap, Justus & Wenzel, Tobias, 2011. "Semi-collusion in media markets," International Review of Law and Economics, Elsevier, vol. 31(2), pages 92-98, June.
    5. Matthew Ellman & Fabrizio Germano, "undated". "What Do the Papers Sell?," Working Papers 149, Barcelona Graduate School of Economics.
    6. Matthew Gentzkow & Jesse M. Shapiro, 2010. "What Drives Media Slant? Evidence From U.S. Daily Newspapers," Econometrica, Econometric Society, vol. 78(1), pages 35-71, January.
    7. Lisa George & Joel Waldfogel, 2003. "Who Affects Whom in Daily Newspaper Markets?," Journal of Political Economy, University of Chicago Press, vol. 111(4), pages 765-784, August.
    8. Jonathan Reuter & Eric Zitzewitz, 2006. "Do Ads Influence Editors? Advertising and Bias in the Financial Media," The Quarterly Journal of Economics, Oxford University Press, vol. 121(1), pages 197-227.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • L00 - Industrial Organization - - General - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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