The Impact of Online Competition on Local Newspapers: Evidence from the Introduction of Craigslist

81 Pages Posted: 24 May 2021

See all articles by Milena Djourelova

Milena Djourelova

Universitat Pompeu Fabra

Ruben Durante

National University Singapore; Barcelona School of Economics; IZA; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Gregory Martin

Stanford University

Multiple version iconThere are 2 versions of this paper

Date Written: 2021

Abstract

How does competition from online platforms affect the organization, performance, and editorial choices of newspapers? And what are the implications of these changes for the information voters are exposed to and for political accountability? We study these questions using the staggered introduction of Craigslist - the world’s largest online platform for classified advertising - across US counties between 1995 and 2009. This setting allows us to separate the effect of competition for classified advertising from other changes brought about by the Internet, and to compare newspapers that relied more or less heavily on classified ads ex ante. We find that, following the entry of Craigslist, local papers experienced a significant decline in the number of newsroom and management staff. Cuts in editorial staff disproportionately affected reporters covering politics. These organizational changes led to a reduction in news coverage of politics and political corruption, and resulted in a decline in newspaper readership which was not compensated by increased news consumption on other media. Finally, we find some evidence that reduced news coverage of politics was associated with lower voter turnout, and more party-line voting for both citizens and politicians.

JEL Classification: L820, L860, D720

Suggested Citation

Djourelova, Milena and Durante, Ruben and Martin, Gregory, The Impact of Online Competition on Local Newspapers: Evidence from the Introduction of Craigslist (2021). CESifo Working Paper No. 9090, Available at SSRN: https://ssrn.com/abstract=3849868 or http://dx.doi.org/10.2139/ssrn.3849868

Milena Djourelova (Contact Author)

Universitat Pompeu Fabra ( email )

Ruben Durante

National University Singapore ( email )

HOME PAGE: http://www.rubendurante.net

Barcelona School of Economics ( email )

Carrer de Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain

IZA ( email )

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

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Gregory Martin

Stanford University ( email )

Stanford, CA 94305
United States

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