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

21 Pages Posted: 6 Mar 2010

See all articles by Hans Jarle Kind

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

Multiple version iconThere are 3 versions of this paper

Date Written: November 11, 2009

Abstract

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 a¤ect newspaper differentiation 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.

Keywords: Two-sided markets, ad-valorem taxes

JEL Classification: D40, D43, H21, H22, L13

Suggested Citation

Kind, Hans Jarle and Schjelderup, Guttorm and Stähler, Frank, Newspaper Differentiation and Investments in Journalism: The Role of Tax Policy (November 11, 2009). NHH Dept. of Finance & Management Science Discussion Paper No. 2009/12, Available at SSRN: https://ssrn.com/abstract=1564785 or http://dx.doi.org/10.2139/ssrn.1564785

Hans Jarle Kind

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 (Contact Author)

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

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
Australia

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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