Saving newspapers with public grants–The effects of press subsidies on the provision of journalistic quality
MA Leroch, CM Wellbrock - Information Economics and Policy, 2011 - Elsevier
Many European governments subsidize their newspapers with the intention to guaranteeing
high journalistic quality. Since journalistic quality is not defined by consumer preferences,
increasing will not necessarily lead to benefits for all consumers. Based on this idea, the
demand for a regional newspaper monopolist is modeled and the profit maximizing level of
journalistic quality is analysed. We find that frequently used sales subsidies may be counter-
productive as they can lead the newspaper to reduce journalistic quality.
high journalistic quality. Since journalistic quality is not defined by consumer preferences,
increasing will not necessarily lead to benefits for all consumers. Based on this idea, the
demand for a regional newspaper monopolist is modeled and the profit maximizing level of
journalistic quality is analysed. We find that frequently used sales subsidies may be counter-
productive as they can lead the newspaper to reduce journalistic quality.