Inequality and Media Capture

Abstract:     
People's support of redistributive policies depends on information they have about the tax system and efficiency of public projects. Mass media provides a convenient means for manipulating public opinion, even when voters understand that the media can be biased. I develop a theory of media capture in which the rich can influence information published in a media outlet at a cost. The model shows that higher inequality is associated with lower media freedom; this effect is stronger in democratic regimes. I find empirical support for the model in both panel data and cross-country models.

Keywords: inequality, redistribution, mass media, taxation, public goods

JEL Classification: D31, D72, H41

Accepted Paper Series