Advertising Spending and Media Bias: Evidence from News Coverage of Car Safety Recalls

55 Pages Posted: 16 Oct 2017 Last revised: 31 May 2021

See all articles by Graham Beattie

Graham Beattie

University of Pittsburgh

Ruben Durante

Catalan Institution of Research and Advanced Studies (ICREA); Universitat Pompeu Fabra, Department of Economics and Business, Students

Brian G. Knight

Brown University - Department of Economics; National Bureau of Economic Research (NBER)

Ananya Sen

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Multiple version iconThere are 3 versions of this paper

Date Written: October 2017

Abstract

Do news media bias content in favor of advertisers? We examine the relationship between advertising by auto manufacturers in U.S. newspapers and news coverage of car safety recalls. This context allows us to separate the influence of advertisers, who prefer less coverage, from that of readers, who demand more. Consistent with theoretical predictions, we find that newspapers provide less coverage of recalls by their advertisers, especially the more severe ones. Competition for readers from other newspapers mitigates bias, while competition for advertising by online platforms exacerbates it. Finally, we present suggestive evidence that lower coverage increases auto fatalities.

Suggested Citation

Beattie, Graham and Durante, Ruben and Knight, Brian G. and Sen, Ananya, Advertising Spending and Media Bias: Evidence from News Coverage of Car Safety Recalls (October 2017). NBER Working Paper No. w23940, Available at SSRN: https://ssrn.com/abstract=3053741

Graham Beattie (Contact Author)

University of Pittsburgh ( email )

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Ruben Durante

Catalan Institution of Research and Advanced Studies (ICREA) ( email )

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Barcelona, 08010
Spain

Universitat Pompeu Fabra, Department of Economics and Business, Students ( email )

Barcelona
Spain

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Brian G. Knight

Brown University - Department of Economics ( email )

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Providence, RI 02912
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National Bureau of Economic Research (NBER)

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Ananya Sen

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

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Cambridge, MA 02142
United States

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