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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/52470
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| Title: | | Newspaper differentiation and investments in journalism: The role of tax policy  |
| Authors: | | Kind, Hans Jarle Schjelderup, Guttorm Stähler, Frank |
| Issue Date: | | 2011 |
| Series/Report no.: | | CESifo working paper: Industrial Organisation 3582 |
| Abstract: | | Many countries levy reduced-rate indirect taxes on newspapers, with proclaimed policy goals of stimulating investment in journalism and ensuring low newspaper prices. However, by taking into account the fact that the media industry operates in two-sided markets, we find the paradoxical result that the consequences of a low-tax regime might be quite the opposite; low investments and high prices. We also show that the low-tax regime tends to increase newspaper differentiation. If the advertising market is relatively small, the newspapers might invest too little in journalism and be too differentiated from a social point of view. In this case a tax increase will be welfare-enhancing. |
| Subjects: | | two-sided markets ad-valorem taxes |
| JEL: | | D40 D43 H21 H22 L13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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