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http://ssrn.com/abstract=1941831
 
 

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


Hans Jarle Kind


Norwegian School of Economics & Business Administration (NHH); CESifo (Center for Economic Studies and Ifo Institute); Norwegian School of Economics (NHH) - Department of Economics

Guttorm Schjelderup


Norwegian School of Economics (NHH) - Department of Business and Management Science

Frank Stähler


University of Tuebingen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); University of Adelaide - School of Economics

September 9, 2011

NHH Dept. of Economics Discussion Paper No. 16/2011

Abstract:     
Many countries levy reduced-rate indirect taxes on newspapers, with proclaimed policy goals of stimulating investment in journalism and ensuring low newspaper prices. However, by taking into account the fact that the media industry operates in two-sided markets, we find the paradoxical result that the consequences of a low-tax regime might be quite the opposite; low investments and high prices. We also show that the low-tax regime tends to increase newspaper differentiation. If the advertising market is relatively small, the newspapers might invest too little in journalism and be too differentiated from a social point of view. In this case a tax increase will be welfare-enhancing.

Number of Pages in PDF File: 29

Keywords: Two-sided markets, ad-valorem taxes

JEL Classification: D4, D43, H21, H22, L13

working papers series


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Date posted: October 10, 2011  

Suggested Citation

Kind, Hans Jarle and Schjelderup, Guttorm and Stähler, Frank, Newspaper Differentiation and Investments in Journalism: The Role of Tax Policy (September 9, 2011). NHH Dept. of Economics Discussion Paper No. 16/2011. Available at SSRN: http://ssrn.com/abstract=1941831 or http://dx.doi.org/10.2139/ssrn.1941831

Contact Information

Hans Jarle Kind (Contact Author)
Norwegian School of Economics & Business Administration (NHH) ( email )
Helleveien 30
Bergen, NO-5045
Norway
+47 55 583 890 (Phone)
+47 55 583 901 (Fax)
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Norwegian School of Economics (NHH) - Department of Economics
Helleveien 30
N-5035 Bergen
Norway

Guttorm Schjelderup
Norwegian School of Economics (NHH) - Department of Business and Management Science ( email )
Helleveien 30
Bergen, NO-5045
Norway
Frank Stähler
University of Tuebingen - Department of Economics ( email )
Mohlstrasse 36
D-72074 Tuebingen, 72074
Germany
HOME PAGE: http://www.frank-staehler.de
CESifo (Center for Economic Studies and Ifo Institute) ( email )
Poschinger Str. 5
Munich, DE-81679
Germany
University of Adelaide - School of Economics ( email )
Adelaide SA, 5005
Australia
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