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Markets in Everything: Media
From a new paper by Di Tella and Franceschelli:
We construct measures of the extent to which the 4 main newspapers in Argentina report government corruption in their front page during the period 1998-2007 and correlate them with the extent to which each newspaper is a recipient of government advertising. The correlation is negative. The size is considerable: a one standard deviation increase in monthly government advertising (0.26 million pesos of 2000) is associated with a reduction in the coverage of the government's corruption scandals by almost half of a front page per month, or 37% of a standard deviation in our measure of coverage. The results control for newspaper, month and individual corruption scandal fixed effects.In Maharashtra, India a recent report indicates that transactions costs are considerably lower:
The deals were many and varied. A candidate had to pay different rates for ‘profiles,’ interviews, a list of ‘achievements,’ or even a trashing of his rival in some cases. (With the channels, it was “live” coverage, a ‘special focus,’ or even a team tracking you for hours in a day.) Let alone bad-mouthing your rival, this “pay-per” culture also ensures that the paper or channel will not tell its audiences that you have a criminal record. Over 50 per cent of the MLAs just elected in Maharashtra have criminal charges pending against them....Hat tip to catfish for the second item.
Posted by Alex Tabarrok on November 2, 2009 at 06:45 AM in Economics, Travels | Permalink
Comments
I think it works the opposite in the United States. Interest groups, not the government, pay for advertising. Think about television news and cable. How many advertisements by interest groups do you see on cable and the news: healthcare proposals, card check, etc. To the extent the media reports on the media created event (e.g., teabaggers), the media also attracts the revenue from the issue add--a Chamber of Commerce advertisement.
Posted by: Bill at Nov 2, 2009 9:00:44 AM
A variation of interest group's interest in developing controversy--in a sense, supply of controversy creating its own demand--is that an interest group can raise more funds for its cause if there is a well publicised controversy, but not if there is no controversy. Thus, if Obama seeks to appoint a relatively non-controversial Supreme Court justice, interest groups that could raise money (right to life, gun groups, etc.) are disappointed if the candidate has no discernable views.
We often think it is candidates who bring in the money, but, really it is the interest groups, ranging from the Sierra Club to the NRA that benefit from polarized controversy.
Posted by: Bill at Nov 2, 2009 5:11:33 PM
That's the deal...Media has an important role in Marketing.
Posted by: Susan @ bigjobsboard at Nov 4, 2009 9:48:34 AM
The point about India's corrupt election system was explored in fiction by Arvind Adiga in "The White Tiger" (a good, quick read and a rather Dickensian look into the vast part of India still trapped under poor institutions, Malthusian limitations and, dare I say it, cultural impediments).
Posted by: Karen at Nov 4, 2009 11:50:19 AM
