Social Media Sharing and Online News Consumption
46 Pages Posted: 14 Feb 2019
Date Written: February 4, 2019
Publishers' strategies in the digital age depend critically on whether social media substitutes for or drives online news consumption. Unfortunately, a number of empirical challenges, including endogeneity and the confounding effect of inherent newsworthiness, make identifying the causal effect of social media on news consumption difficult. We overcome these challenges by leveraging exogenous variation in regional news consumption to identify the cross region viewership effects of news sharing on social media. We apply this method to a novel data set constructed from over 200 million page views of the New York Times between April 8, 2013 to October 27, 2013. Exploiting regional rainfall as a natural experiment, we first identify positive and significant cross-region peer effects in online news consumption. A 1% increase in aggregate viewership outside of a focal region causes viewership in that region to increase by approximately 0.34%. Further analysis suggests that social media is the primary driver of these cross-region peer effects. Specifically, cross-region peer effects in viewership are stronger when referred by social media than when referred by search engines. Furthermore, regions that are strongly-connected with each other on social media exhibit more positive and significant peer effects than regions that are weakly-connected. Taken together, these results suggest that social media sharing drives online news consumption.
Keywords: Social Media, Online News, Instrumental Variables, Peer Effects
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