partisan bias in economic news evidence on the agenda setting behavior of u s newspapers abstract we study the agenda setting political behavior of a large sample of u s newspapers during the 1996 2005 period our purpose is to examine the intensity of coverage of economic issues as a function of the underlying economic conditions and the political affiliation of the incumbent president focusing on unemployment inflation the federal budget and the trade deficit we investigate whether there is any significant correlation between the endorsement policy of newspapers and the differential coverage of bad good economic news as a function of the president s political affiliation we find evidence that newspapers with pro democratic endorsement pattern systematically give more coverage to high unemployment when the incumbent president is a republican than when the president is democratic compared to newspapers with pro republican endorsement pattern this result is robust to controlling for the partisanship of readers we find similar but less robust results for the trade deficit we also find some evidence that newspapers cater to the partisan tastes of readers in the coverage of the budget deficit we find no evidence of a partisan bias or at least of a bias that is correlated with the endorsement or reader partisanship for stories on inflation

democracy visibility and public good provision we examine the role of visibility in influencing government resource allocation across a multiplicity of public goods we show that a visibility effect distorts governmental resource allocation such that it helps explain why governments neglect provision of essential public goods despite their considerable benefits we show that greater democratization widens the gap in resource allocation between more visible such as famine prevention versus less visible such as malnutrition prevention public goods up to an intermediate level of democracy beyond this level this gap decreases furthermore public goods with low visibility are prone to multiple equilibria in resource allocation with voter expectations being shown to be important

media markets and localism does local news en espanol boost hispanic voter turnout the same time the availability of these products reduces the consumption of local news not only because some consumers prefer national and global content to local information but also because local media products that lose a significant number of consumers are forced to cut qual ity and they may even cease to exist if their audience falls below a critical threshold for these reasons some scholars claim that the rise of integrated media markets undermines local civic engagement robert d putnam 2000 against this backdrop many regulatory agencies including the federal communications commission fcc of the united states seek to protect local media and promote localism for instance by limiting ownership concentration 1 however localism is desirable only if there are in fact positive spillovers from the provision of local content that can help justify the loss of private welfare that integrated media markets would provide in this paper we propose a simple test for the existence of spillovers from local news pro gramming asking if the presence of local television news affects civic behavior the ubiq uity of local news programming across all us metro areas makes it impossible to study its effects on the general population in contrast the availability of spanish language news has increased considerably in recent years providing us with an experiment to study the effect of local news on one important measure of civic engagement voter turnout in local elections in particular we use a differencing approach asking whether hispanic voter turnout is higher in relation to non hispanic turnout in metro areas with spanish language local television news our results indicate that spanish language local television news raises hispanic turnout by more than 4 percentage points local news targeted at hispanics has no effect on the participa tion of non hispanics and as one would expect a significantly smaller effect in years with a presidential race in markets with spanish language news about a quarter of hispanics turn to these programs our estimates thus imply that news in spanish caused about a fifth of spanish language news viewers to start voting interestingly hispanics with access to news in spanish do not increase the time they spend watching news content analyses of spanish language news programs in the united states find that these shows are much more likely to report on

burr under the saddle how media coverage influences strategic change in this paper we introduce a new antecedent to the strategic change literature by examining the effect of media coverage on the extent of strategic change specifically we examine how negative media coverage may prompt firms to make changes to their resource allocations and then explore how the makeup of the board and firm performance can moderate this relationship we develop a theoretical framework to explain why media coverage may affect strategic change and then test our theory with a longitudinal analysis of 250 firms over a four year period the empirical results lend support to our theory of media influence on strategic change and suggest that the evaluations of firms by outside constituents may influence the decision making of executives

transparency and economic policy we provide a two period model of political competition in which voters imperfectly observe the electoral promises made to other voters imperfect observability generates an incentive for candidates to offer excessive transfers even if voters are homogeneous and taxation is distortionary government spending is larger than in a world of perfect observability transfers are partly financed through government debt and the size of the debt is higher in less transparent political systems the model provides an explanation of fiscal churning it also predicts that groups whose transfers are less visible to others receive higher transfers and that imperfect transparency of transfers may lead to underprovision of public goods from the policy perspective the main novelty of our analysis is a separate evaluation of the transparency of spending and the transparency of revenues we show that the transparency of the political system does not unambiguously improve efficiency transparency of spending is beneficial but transparency of revenues can be counterproductive because it endogenously leads to increased wasteful spending

media competition and electoral politics we build a framework linking competition in the media market to political participation media outlets report on the ability of candidates running for office and compete for audience through their choice of slant citizens consume news only if the expected utility of being informed about candidates ability is sufficiently large for their group collectively our results can reconcile seemingly contradictory empirical evidence showing that entry in the media market can either increase or decrease turnout while information pushes up independent turnout partisans adjust their turnout to the ability of their preferred candidate and on average they vote less when informed

political economy of public policies insights from distortions to agricultural and food markets the agricultural and food sector is an ideal case for investigating the political economy of public policies many of the policy developments in this sector since the 1950s have been sudden and transformational while others have been gradual but persistent this paper reviews and synthesizes the literature on trends and fluctuations in market distortions and the political economy explanations that have been advanced based on a rich global data set covering a half century of evidence on commodities countries and policy instruments the paper identifies hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible

the principle of minimum differentiation holds under sufficient heterogeneity the so called principle of minimum differentiation stated by hotelling has been challenged by many authors this paper restores the principle by showing that n firms locate at the center of the market and charge prices higher than the marginal cost of production when heterogeneity in consumers tastes is large enough

tax policy and the financing of innovation we study tax policy in a schumpeterian growth model with asymmetric information in the financing of innovation investors cannot a priori distinguish between more or less talented entrepreneurs net worth allows talented entrepreneurs to self invest and avoid being pooled with less talented entrepreneurs in the credit market increasing net worth boosts innovation even when financed through higher profit taxes taxing consumption effectively raises net worth and subsidizes profits simultaneously sufficiently taxing consumption implements the social optimum free of adverse selection if forced to tax consumption less the government implements a second best allocation with adverse selection when boosting net worth enough to avoid adverse selection requires taxing profits excessively

the composition and impact of stakeholders agendas on us ethanol production this paper aims to identify the macro environmental dimensions under which journalists scientists and policy makers have framed the liquid biofuels in the us over time the number of publications concerning liquid biofuels from mass media scientific community and government with ethanol production are correlated seeking for causality between ethanol production and those stakeholders agendas text mining techniques were used to explore 2016 mass media news sources 455 scientific papers and 854 government documents published between 1997 and 2006 granger causality tests were performed to analyse the causality concerning stakeholders agendas the results indicate that scientists emphasise environmental agronomic and technological matters while journalists are more interested in covering economic environmental geopolitical and political issues although policies on this subject appear to be more in line with science the trend analysis indicates that the mass media are gaining prominence amongst policy makers the causation analysis suggests that ethanol production and public policy present a bi directional causality at t 2 time lag at t 1 time lag ethanol production precedes the publication of scientific documents which present a bi directional causality with public policy on ethanol and precedes the mass media news in conclusion ethanol production precedes the presence of liquid biofuels on the agendas of scientists journalists and policy makers

mass media instrumental information and electoral accountability journalism is widely believed to be crucial for holding elected officials accountable at the same time economic theory has a hard time providing an instrumental explanation for the existence of accountability journalism according to the common downsian reasoning rational voters should not be willing to pay for information out of purely instrumental motives because the individual probabilities of casting the decisive vote are typically very low we show that this rationale does not apply when a group of voters shares a common goal such as accountability and information is delivered via mass media in contrast to the pessimistic downsian view rational voters can have a considerable willingness to pay for the provision of instrumental information in these scenarios our model thus reconciles the rational voter approach with the common perception of journalism as a watchdog that holds elected officials accountable

independent auditors bias and political agency abstract this paper analyzes political agency with endogenous information collection and revelation by third party auditors while increasing incentives for auditors to provide information straightforwardly improves political control a small amount of pro incumbent bias can also be useful for maintaining high levels of control when the equilibrium level of control is high most investigations uncover positive information about the incumbent since positive information increases reelection rates mildly pro incumbent auditors are willing to work harder than unbiased auditors in these equilibria for moderate levels of control pro incumbent auditors are again useful due to their extra effort even though they may suppress some negative information in equilibrium only when market incentives are low so equilibrium control is weak are unbiased or anti incumbent biased auditors better for voters than mildly pro incumbent auditors

presidential coattails versus the median voter senator selection in us elections abstract we show that senators elected in presidential elections are more ideologically extreme than senators elected in midterm elections this finding is in contrast to the literature suggesting that voters in presidential elections are more ideologically moderate than voters in midterm elections to explain this incongruence we propose a theory of spillover effects in which party labels enable voters to update their beliefs about candidates across contemporaneous races for office unexpected support for a candidate in one race carries marginal candidates from the same party in other races our theory implies that presidential coattails may skew representative government away from the median voter ideal

persistent media bias abstract the news media plays an essential role in society but surveys indicate that the public views the media as biased this paper presents a theory of media bias that originates with private information obtained by journalists through their investigations and persists despite profit maximizing news organizations and rivalry from other news organizations bias has two effects on the demand for news first rational individuals are more skeptical of potentially biased news and thus rely less on it in their decision making this skepticism reduces demand and leads the news organization to set a lower price for its publication the greater is the bias it tolerates lower quality news thus commands a lower price second bias makes certain stories more likely than others given their private information journalists may bias their stories if their career prospects can be advanced by being published on the front page news organizations can control bias by restricting the discretion allowed to journalists but granting discretion and tolerating bias can increase profits if it allows journalists to be hired at a lower wage bias is not driven from the market by a rival news organization nor by a news organization with an opposing bias and the profits of a high bias news organization can be higher than the profits of a low bias one moreover bias can be greater with competition than with a monopoly news organization if individuals collectively choose regulation in place of their individual decision making bias increases the expected stringency of regulation

informative advertising with differentiated products in this paper we study the role of promotional expenditures by sellers in a model of product differentiation advertising conveys full and accurate information about the characteristics of products heterogeneous consumers who have no source of information other than advertisements seek to purchase the products that best fit their needs despite the roles played by advertising in improving the matching of products and consumers and in increasing the elasticity of demand faced by each firm we find that the market determined levels of advertising are excessive given the extent of diversity in the market we derive a promotional equilibrium based on a specific information transmission technology paying explicit attention to the structure of consumer information and its impact on firms demand curves this allows us to study the effects of changes in the advertising technology including an increased ability to target messages to specific groups of consumers on the equilibrium in the product market we find that decreased advertising costs may reduce profits by increasing the severity of price competition

environmental protection a theory of direct and indirect competition for political influence how is it that environmental groups can have a strong impact on environmental policy but without much lobbying this paper develops a model of direct lobbying the government and indirect persuading the public competition for political influence and finds that they are complementary however an increase in the effectiveness of public persuasion or a rise of public environmental awareness induces substitution between the two the findings establish that the empirical phenomenon of lack of political contribution from environmental groups may not be related to financial constraints but to their greater effectiveness in public persuasion and growing public environmental awareness the size of its economic stake and hence the associated lobbying effort and the efficiency of its organization in exerting political influence how then can we explain why some environmental groups have been very successful against polluting industries when the latter s economic stakes seem very high and they lobby more and their interests are more efficiently organized some might suggest that the reason for the success of the environmental movement is that environmental groups have large memberships and can provide block votes 2 however according to olson 1965 a large membership of an interest group is not necessarily an advantage and it is still uncertain whether environmental groups are able to mobilize their members to cast votes based on such affiliations this paper suggests an alternative explanation by developing a theory of direct and indirect competition between special interests for political influence rather than marshalling block votes a primary feature of our framework is that two opposing interest groups an environmentalist group and an industrialist group compete directly and indirectly for political influence in a three stage game the indirect competition takes place in the first stage in which interest groups exert effort in persuading the public to indirectly influence government policy the direct competition takes place in the second stage in which interest groups exert effort in

information and strategic political polarisation we develop a model of electoral competition in which two opportunistic candidates select their policy position and invest in quality policy positions are observed and during the campaign the press reveals some information about quality we demonstrate that when information is imperfect the blackdowns median voter theorem fails to hold for intermediate information levels the unique equilibrium is such that candidates propose policies different from the median voter s bliss point by contrast convergence to the median occurs when quality is almost always or almost never revealed we also show that a profit maximising press may collect more information than socially optimal during the 1995 electoral campaign in belgium the vld a traditionally right wing

mass media and public policy abstract if more informed voters receive favorable policies then mass media should influence policy because it provides most of the information people use in voting this paper uses a simple model to analyze the effect of mass media provision of news on a number of policy issues redistribution the size of the government sector rents and corruption the effectiveness of lobby groups and political business cycles it is easy to deal with such a wide range of issues because existing models of political competition often include informed and uniformed voters modelling mass media simply endogenizes who is informed and who is not the paper also discusses empirical evidence and point to areas for future research

time scarcity and the market for news abstract we develop a theory of news coverage in environments of information abundance time constrained consumers browse through news items across competing outlets they choose which outlets to access and which stories to read or skip thus indirectly deciding how much time to spend on a given outlet firms decide on rankings of news items that maximize their profits we show that even when readers or television viewers and firms are rational and unbiased they spend more time on the news than they would like and not necessarily on the topics they prefer in particular relevant news items may be crowded out we then study how reader efficient standards can be restored and derive implications on diverse aspects of new and traditional media these include tabloidization and polarization of the news and other aspects relevant for the political economy of the media including political knowledge gaps and voter turnout

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

radio s impact on public spending if informed voters receive favorable policies then the invention of a new mass medium may affect government policies since it affects who is informed and who is not these ideas are developed in a voting model the model forms the basis for an empirical investigation of a major new deal relief program implemented in the middle of the expansion period of radio the main empirical finding is that u s counties with many radio listeners received more relief funds more funds were allocated to poor counties with high unemployment but controlling for these and other variables the effects of radio are large and highly significant

a spatial theory of media slant and voter choice we develop a theory of media slant as a systematic filtering of political news that reduces multidimensional politics to the one dimensional space perceived by voters economic and political choices are interdependent in our theory expected electoral results influence economic choices and economic choices in turn influence voting behaviour in a two candidate election we show that media favouring the front runner will focus on issues unlikely to deliver a surprise while media favouring the underdog will gamble for resurrection we characterize the socially optimal slant and show that it coincides with the one favoured by the underdog under a variety of circumstances balanced media giving each issue equal coverage may be worse for voters than partisan media

an information rationale for the power of special interests political decisions are often biased in favor of special interests at the expense of the general public and they are frequently inefficient in the sense that the losses incurred by the majority exceed the gains enjoyed by the minority this article explains the bias in terms of information asymmetries and the free rider problem first incumbents increase their reelection prospects by biasing policy toward groups that are better able to monitor their activities second because smaller groups are better able to overcome the free rider problem of costly monitoring policy will be biased in their favor third the effect of asymmetric monitoring on voter welfare is ambiguous the inefficiencies created by the policy bias are offset by a positively valued selection bias incumbents of above average quality are more likely to survive voter scrutiny than are low quality types

media monitoring and capture of public funds evidence from madagascar summary this paper investigates the role of media and monitoring in reducing capture we analyze data on capture of public expenditures by local officials in madagascar our findings indicate important constraints on decentralization of public service delivery in particular in remote areas capture could be successfully constrained through a combination of media programs and monitoring intensive monitoring and access to media reduce capture however the impact of media is conditional on characteristics of the population with high illiteracy in poor regions the effectiveness of newspaper and poster campaigns is limited and radio and television programs are more important to reduce capture

manipulated news model electoral competition and mass media abstract this paper investigates the relationship between media manipulation the strategic suppression of relevant information by mass media and self mediatization the strategic exploitation of media coverage by candidates in elections in the model a voter cannot directly observe the policies proposed by two office motivated candidates the voter learns this information through media reports before voting takes place while the media outlet suppresses some of this information because the voter s decision making could be incorrect direct distortion the candidates have an incentive to win the election by influencing the media coverage through policy settings indirect distortion as a result policy convergence to the voter s ideal policy occurs if and only if the media bias is sufficiently small we then characterize the set of equilibria in terms of the degree of distortion the results suggest that if either strategic media manipulation or competition among the candidates is omitted then the distortion is nonnegligibly misspecified

portfolio insurance gap risk under conditional multiples abstract the research on financial portfolio optimization has been originally developed by markowitz 1952 it has been further extended in many directions among them the portfolio insurance theory introduced by leland and rubinstein 1976 for the option based portfolio insurance obpi and perold 1986 for the constant proportion portfolio insurance method cppi the recent financial crisis has dramatically emphasized the interest of such portfolio strategies this paper examines the cppi method when the multiple is allowed to vary over time to control the risk of such portfolio management a quantile approach is introduced together with expected shortfall criteria in this framework we provide explicit upper bounds on the multiple as function of past asset returns and volatilities these values can be statistically estimated from financial data using for example arch type models we show how the multiple can be chosen in order to satisfy the guarantee condition at a given level of probability and for various financial market conditions

government control of the media abstract we present a formal model of government control of the media to illuminate variation in media freedom across countries and over time media bias is greater and state ownership of the media more likely when the government has a particular interest in mobilizing citizens to take actions that further some political objective but are not necessarily in citizens individual best interest however the distinction between state and private media is smaller large advertising markets reduce media bias in both state and private media but increase the incentive for the government to nationalize private media media bias in state and private media markets diverge as governments become more democratic whereas media bias in democracies and autocracies converge as positive externalities from mobilization increase

media as watchdogs the role of news media in electoral competition abstract we develop an equilibrium model to analyze the role of the media in electoral competition when policy payoffs are state dependent party policies do not converge to the median voter s ideal policy if the media report only party policies news analysis about the state though possibly biased can discipline off equilibrium deviations and make the parties adopt more centrist policies since voters are rational the party favored by the media need not win with a higher probability instead media bias may reduce the effectiveness of electoral competition and lead to more polarized policies

the impact of commercial television on turnout and public policy evidence from norwegian local politics abstract we investigate the impact of commercial television on political participation and local policy outcomes exploiting a geographically staggered expansion of cable television after the liberalization of norwegian broadcasting in 1981 we show that higher cable television penetration significantly reduced turnout in municipal elections using individual level data we find that cable television coverage had a negative effect on the extent to which respondents were exposed to political information through mass media the effect is more pronounced for individuals that on average watch more cable television namely individuals with fewer years of schooling consistent with an increased difference in political participation and exposure to information between more and less educated groups we find that commercial television led to reduced public spending and increased the share spent on education the results are evidence that commercial mass media can influence electoral politics by reducing political participation and exposure to information of its target audiences

media freedom and gender equality a cross national instrumental variable quantile analysis we investigate the impact of media freedom on gender equality in education for a sample of 63 countries taken over the period 1995 2004 our analysis is motivated by the idea that the impact of media freedom on gender equality may differ over the conditional distribution of the response variable using instrumental variable quantile regression to control for endogeneity in per capita income we find that greater freedom of the media improves gender equality only in the 0 25 and 0 50 quantiles of the conditional distribution countries with the greatest disparities in gender outcomes experience no significant impact of media freedom

media capture in a democracy the role of wealth concentration abstract since objective news coverage is vital to democracy captured media can seriously distort collective decisions the current paper develops a voting model where citizens are uncertain about the welfare effects induced by alternative policy options and derive information about those effects from the mass media the media might however secretly collude with interest groups in order to influence the public opinion in the case of voting over the level of a productivity enhancing public bad it is shown that an increase in the concentration of firm ownership makes the occurrence of media bias more likely although media bias is not always welfare worsening conditions for it to raise welfare are restrictive

selective reporting of factual content by commercial media the authors study the market for factual content and examine whether competition increases or decreases its provision factual content is supplied by commercial media firms which observe a set of facts depicting the state of the world and selectively decide how to report them consumers value content that matches their opinion which incentivizes media firms to slant their reports by omitting certain facts novel features in the authors model include consumers ability to anticipate the media s incentives for slant and the requirement that all media stances must be supported by facts furthermore consumers find reports with more facts to be more convincing despite consumers ability to detect slant and their demand for factual support the research shows that competition results in consumers reading fewer facts and being unable to update their prior beliefs about the state of the world the authors also find that a monopoly medium may be more polarizing than competitive media and that polarized report

electoral competition and special interest politics have fixed positions on some issues but vary their positions on others in order to attract votes and campaign contributions in this context we examine whether special interest groups are governed by an electoral motive or an influence in their campaign giving and how their contributions affect the equilibrium platforms we show that each party is induced to behave as if it were maximizing a weighted sum of the aggregate welfares of informed voters and members of special interest groups the party that is expected to win a majority of seats caters more to the special interests

mass media competition political competition and public policy if better informed voters receive favourable policies then mass media will affect policy because mass media provide most of the information people use in voting this paper models the incentives of the media to deliver news to different groups the increasing returns to scale technology and advertising financing of media firms induce them to provide more news to large groups such as taxpayers and dispersed consumer interests and groups that are valuable to advertisers this news bias alters the tradeoff in political competition and therefore introduces a bias in public policy the paper also discusses the effects of broadcast media replacing newspapers as the main information source about politics the model predicts that this change should raise spending on government programmes used by poor and rural voters

advertising and media capture the case of climate change abstract this paper analyzes whether media capture by advertisers is a potential source of the divergence between the scientific consensus and public discourse about climate change i develop an objective measure of the tone of climate change coverage by creating an index that builds on gentzkow and shapiro 2010 using phrase frequency analysis to compare newspaper text with the un s ipcc reports and the heartland institute s skeptical response each of which are lengthy official reports with clear stances on climate change i also develop a measure of potential advertising from the auto industry using national shocks to advertising at the manufacturer level weighted by previous advertising at the newspaper level the empirical analysis shows that this potential advertising allows firms to capture newspapers within newspaper the potential for advertising from car manufacturers shifts the tone of coverage towards skepticism i also find suggestive evidence that potential advertising reduces the overall quantity of coverage of climate change

campaign spending with office seeking politicians rational voters and multiple lobbies abstract i introduce a microfounded model of campaign finance with office seeking politicians a continuum of voters and a large number of heterogeneous lobbies lobbies make contributions to politicians according to a common agency framework politicians use contributions to finance their electoral expenditures voters are not fooled by electoral expenditures they are influenced in a way that is consistent with the equilibrium behavior of lobbies and politicians the model is used to i determine the relation between campaign spending and the deviation from the median voter s preferred policy ii show the informational value of lobbies contributions iii evaluate the welfare implications of restricting campaign spending and iv interpret the empirical finding that campaign expenditures have a very low effect on election outcome although in equilibrium advertising provides voters with useful information under reasonable parameter values a ban on campaign contributions makes the median voter better off journal of economic literature classification numbers d72 d82 m37

electoral competition with informed and uninformed voters i present a model of electoral competition in which candidates raise campaign contributions by choosing policies that benefit interest groups and then expend those contributions to influence voters who are uninformed about the policies informed voters however vote based on those policies so candidates face a trade off between choosing a policy to generate funds to attract the uninformed vote and choosing a policy to attract the informed vote electoral equilibria are characterized for two categories of policies particularistic and collective in the case of particularistic policies the equilibrium policies of the candidates are separated if the proportion of uninformed voters is sufficiently high and the degree of separation is an increasing function of that proportion the model is extended to include the public financing of elections and incumbency advantages for the case of collective policies the candidates locate at the median of the ideal points of the informed voters and contributions are zero

a spatial theory of news consumption and electoral competition we characterize the optimal editorial positions of the media in a model in which the media influence both voting behaviour and party policies political parties are less likely to choose partisan policies when more voters consume informative news when there are two media outlets each should be slightly biased relative to its audience in order to attract voters with relatively extreme views voter welfare is typically higher under a duopoly than under a monopoly two media outlets under joint ownership may provide more diverse viewpoints than two independent ones but voter welfare is not always higher copyright 2008 wiley blackwell