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

Kind, Hans Jarle; Schjelderup, Guttorm; Stähler, Frank

doi:10.2139/ssrn.1564785

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

NHH Dept. of Finance & Management Science Discussion Paper No. 2009/12

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); NHH Norwegian School of Economics - Department of Economics

Guttorm Schjelderup

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

Frank Stähler

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

There 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: 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