Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Empirical Industrial Organization No. G9-V2
We use a new dataset on the Swiss newspaper industry from 1999 to 2008 to estimate the substitution patterns between free newspapers and traditional media. Our identification strategy exploits the timing of free newspaper entry and allows for confounding trends. We find that the entry of free newspapers has no effect on the circulation of high quality newspapers, but a negative effect on the circulation of the incumbent yellow press. Moreover, free papers appear to be a complement to traditional news media for highly educated readers. Therefore, we conclude that the effect of free newspapers on consumer surplus is positive.