Discussion Paper No. 850

JAPANESE NEWSPAPERSDavid FlathAugust 2012

The Institute of Social and Economic Research
Osaka University
6-1 Mihogaoka, Ibaraki, Osaka 567-0047, Japan

August 5, 2012

Japanese Newspapers
David Flath*Institute of Social and Economic Research, Osaka University
abstract
In Japan, newspapers enjoy a special exemption from antimonopoly prohibitions against
resale price maintenance (suppliers’ stipulations that bar downstream firms from pricediscounting), but are each required to set uniform prices throughout Japan. In fact, thenewspapers have rarely changed their subscription prices in recent years, and the threeleading national dailies, together accounting for about half the total industry circulation, andthirteen other papers accounting for another one eighth of industry circulation, all have set
exactly the same price (3,925 yen per month for combined morning-and-evening editions,and 3,007 yen per month for morning-only). The remaining local papers all set lower prices.
The authorized resale price maintenance, and prohibition against prices that vary
geographically, arguably have allowed collusive price increases, but by precisely how muchit is difficult to judge. I here estimate that if the coordinated pricing of the leading national
and local newspapers is inflating their prices by 340 yen per month (about a 10 percent
increase in their prices), it entails economic waste of 86-billion yen ($1-billion) per year but isadding only around 5-billion yen per year to newspaper industry profit. The estimate is basedon an econometric model of newspaper demand, estimated for 47 Japanese newspapers
using March 2007 micro-data. The paper also estimates the demand and supply ofnewspaper advertising and a newspaper subscription price equation using 2007
cross-section data. The subscription pricing equation reflects the interdependence ofdemand between morning-only subscriptions and morning-and-evening subscriptions
offered by the same newspaper
JEL codes: D4,L4
Keywords: resale price maintenance, two-sided markets, newspapers, advertising*Institute of Social and Economic Research
Osaka University
6-1 Mihogaoka, Ibaraki
Osaka 567-0047
JAPAN
Tel: 81-(0)6-6879-8569
E-mail: flath@iser.osaka-u.ac.jp
This research is supported by Japan Society for the Promotion of Science, Grant-in-Aid for
Scientific Research (C), grant no. 22530227.

Japanese Newspapers
1. Introduction.
In Japan, newspapers enjoy a special exemption from antimonopoly prohibitions
against resale price maintenance (suppliers’ stipulations that bar downstream firms from pricediscounting), but are each required to set uniform prices throughout Japan. The three leading
national dailies, and eleven of the regional and local dailies, seem to have exploited thisantitrust exemption to maintain collusive subscription fees. This has benefitted the othernewspapers and may have promoted improvements in their content, but has wastefully diverted
resources away from the newspaper business and towards other less valued activities.
Econometric estimate of the effects of this poses many challenges which constitute the mainburden of the present paper.

I can here really only make an educated guess as to how large

is the effect on prices of the coordination by the leading newspapers, and I guess it is about
ten percent.

I then calculate the effects on consumer surplus and newspaper profit of such acollusive price increase based on estimated demand for newspapers constructed frommixed-logit estimate of an indirect utility function using March 2007 micro-data. Suchcollusion confers social waste in the neighborhood of 86-billion yen ($1-billion) per year, but
only increases newspaper industry profit by 5-billion yen per year (about $40-million peryear). The waste is many times greater than the added profit.
The main reason why collusive price-setting by Japan’s leading newspapers imposes
economic waste vastly out of proportion to the added profit it confers is that the newspapers
are horizontally differentiated. The newspapers would each exhibit a degree of market power
even without colluding, facing elasticities of demand here estimated to be less than two. The
newspapers gain something by colluding but not much.

The relative inelasticity of demand

for newspaper subscriptions reflects the daily habit of reading a particular paper.

In Japan,most residents can choose among the four national newspapers and at least one local or1

regional newspaper.

Many of them strongly prefer the one they are in the habit of reading

daily.
A further influence on the effects of newspaper collusion is that newspapers sell
advertising as well as subscriptions.

To put it another way, newspapers are platforms in

two-sided markets.

I estimate the elasticity of demand for advertising in any Japanesenewspaper as 1.3.

Because selling advertising is profitable and the demand for advertising is

proportionate to newspaper circulation, the newspapers tend to set lower subscription prices
than they would if not selling ads. But this means that the loss in consumer surplus fromraising the subscription price is relatively great because the price increase is applied to a large
circulation.

On the other hand, the collusive price increase has little effect on theindustry-wide demand for newspaper advertising because it mainly shifts demand from thenewspapers that coordinate in setting higher prices toward the ones that do not, rather thancausing demanders to not subscribe to any newspaper at all.
The econometric analysis that is the main content of the present paper follows in aline of research on newspaper economics initiated by Rosse (1970) and extending to Van
Argentesi and Filistrucchi (2007), Cayseele and Vanormelingen (2009), Fan (2011), andothers.

The main novelties of this paper are that it uses micro-data rather than only

aggregate data to estimate demand, and it models the interdependence of demand between
morning-only subscriptions and morning-and-evening subscriptions offered by the samenewspaper. It is also the first contribution to this literature that focuses on the Japanesenewspaper industry, which is among the largest in the world based on circulation and whichis showing remarkable resilience in the face of increasing competition from digital media.
The micro-data used here come from a March 2007 random-direct-dial telephonesurvey of 27,788 persons living throughout Japan conducted by Video Research, Ltd. (the2007 edition of its annual JREAD survey).

I use these data to estimate the common

parameters of a mixed-logit indirect utility function relating respondents’ choices among2

available daily newspaper subscriptions (including the choice of not subscribing to any
newspaper), to their own individual characteristics such as age, income and education and to
attributes of the newspapers available in the prefecture where each resides.

Attributes of thenewspapers include subscription price, number of pages of content per month, and whether
the subscription is morning-and-evening or morning-only.

Although the national

newspapers are priced the same everywhere in Japan, they compete with different local andregional newspapers in each prefecture. The variation in choice sets across prefectures issufficient to identify the effects of subscription price and other newspaper attributes on
respondents’ choices.

I find that price elasticities of demand for most newspapers lie

between 1.2 and 2 and that elasticities of demand with respect to number of pages of content
per month lie between 0.2 and 0.5.

Because many of the Japanese newspapers offer achoice between morning-and-evening subscriptions and morning-only, interpreting theseestimates requires a model that can accommodate the effects of price of each type ofsubscription on the demand for the other type. In effect, the newspapers offering both kindsof subscription are multiproduct oligopolists. I show how profit-maximizing newspapers
consider the cross-elasticity of demand between the different types of subscription whensetting the prices.

I also estimate the demand and supply of newspaper advertising and anewspaper subscription price equation using 2007 cross-section data.
Before describing the analysis and estimates on which these inferences are based, I
shall first describe some relevant features of the Japanese newspaper industry and its pricing
practices.

2. The Japanese Newspaper Industry.
Japan has five national news dailies (Mainichi, Asahi, Yomiuri, Nikkei and Sankei),
several bloc papers that are available in contiguous prefectures (Tokyo Shinbun, Chunichi
Shimbun, Chugoku Shinbun, and Nishi Nippon Shinbun), and another 40 or 50 newspapers
3that mainly serve a single prefecture. The Nikkei, often compared with the Wall Street
Journal, features business and financial news and is not a focus of my study here. The otherfour national dailies, Yomiuri, Mainichi, Asahi, and Sankei together account for about half thetotal circulation of all newspapers. The total circulation of news dailies (not including sports
dailies, tabloids, or political newspapers) in Japan is about 85 percent of the number ofhouseholds and more than 95 percent of sales are by monthly subscription rather thansingle-issue.
Table 1 shows the 2007 household penetration rates in each prefecture for thenewspapers that are the focus of this study.

It includes the four national dailies other than

Nikkei and all of the other dailies with circulation of 100,000 or more.

Of the 47

newspapers, all four of the national newspapers and nine local newspapers are available in atleast some prefectures either as morning-only subscription or morning-and-evening
subscription. Another eight newspapers are only available as morning-and-evening
subscription. And the remaining 18 do not publish evening editions. It is evident from thetable that the local papers enjoy large shares in many of the less populous prefectures.

This iseven more evident in the Figure 1 showing the cumulative circulation of newspapers in eachprefecture of Japan moving from west to east.
The newspaper publishers distribute through independent newsdealers. The typicalarrangement entails an exclusive geographic territory assigned by the newspaper company,
daily purchase of a number of copies, the number being set by the newspaper company, andresale at a price stipulated by the newspaper –exclusive territory, stipulated resale price and asales quota. That the newspapers enforce sales quotas, which would violate antimonopoly
proscriptions, is widely denied by the newspaper companies but is evidently a fact. The
newspapers that are shipped and billed to the distributors, and unwanted by them, are referred
to as oshigami–literally “push papers”. Documentation of this practice can be found in the
Wikipedia entry for “shinbun hanbai ten” (newspaper sellers in Japan).
4

The Japanese newspapers, and other publishers, enjoy a special exemption from
antimonopoly prohibitions against resale price maintenance (Antimonopoly, Section 23-2 (4)).
The exemption dates from the 1953 amendments to the 1947 Antimonopoly Law.
Newspaper publishers are also bound by a special directive of the Japan Fair Trade
Commission enjoining against charging differing prices according to the area or person buying(most recently “Specific Unfair Trade Practices in the Newspaper Business”, Fair Trade
Commission Notification, no. 9, July 21, 1999, amending the similar earlier notification no. 14,
1964). The directive also disallows discount pricing by newspaper distributors, and disallows
the newspaper publishers from imposing minimum quantities (sales quotas) on distributors,
though apparently as already stated the publishers do this anyway. Under the special directive,
each newspaper is free to set its own price but must then charge that same price wherever thenewspaper is sold. Different editions of the newspaper may command differing prices. At
least since 1945 and probably before that, the three leading national dailies Yomiuri, Asahi andMainichi, have all set the same subscription price as one another and changed that price atroughly the same time as one another. Price changes for all of the newspapers are infrequent.
The last price change was in 2003, nine years ago.

Since then a monthly

morning-and-evening subscription to any of the four national newspapers is 3,925 yen (around$40). A morning-only subscription to the three other than Sankei is 3,007 yen per month.
Not only the three leading national newspapers but also 13 local and bloc newspapers set
exactly these same prices. The other newspapers set lower prices.

The Japan Newspaper

Association has publicly supported the continuation of the special antitrust exemption allowing
newspapers to maintain retail prices and indeed forestalled the adoption of a proposal in 2001
to repeal it.
Why resale price maintenance? A quick –and I think wrong– answer is that the retailprice stipulation is actually a maximum retail price and is to prevent the independent
distributors from exploiting the local monopolies that their exclusive territories confer.
5Byraising the price to increase its own profit a distributor would actually diminish the total profit
in the supply chain, the successive monopoly problem. Those who are familiar with US
antitrust law will recall the Albrecht case1 in which Herald Publishing Company, publisher of
the St. Louis Globe Democrat, was found by the U. S. Supreme Court to have violated
prohibitions against resale price maintenance in an apparent attempt to deter exactly this sort of
overpricing. The resale price maintenance of Japanese newspapers is different because thesales quotas that the newspapers impose on the distributors deter the distributors from raising
prices. The sales quotas are set at levels that not only deter overpricing but that also encouragesolicitation of new subscriptions. Because of this, the stipulated retail prices are binding
downward; they are price floors, not price ceilings. A simple explanation is that the resale
price maintenance is part of a cartel scheme among the newspaper companies.
Examples of resale price maintenance as a producer cartel scheme have been noted
empirically and explored theoretically. We have the Telser (1960) discussion of the light bulb
case. In the early twentieth century, duopolists Westinghouse and GE sold light bulbs throughexclusive independent retail outlets and both stipulated the same minimum resale prices. In
Telser’s explanation, retail price discounting could be more easily detected and deterred than
could wholesale price discounting, and exclusive dealing prevented retailers’ profiting fromany secret wholesale price discounts that were not passed on as retail price discounts. In Flath(1989) I suggested that a producer cartel scheme was the likely motive for resale pricemaintenance by the three producers of infant powdered milk in Japan, as documented in aseries of antimonopoly cases, from the 1960s and 1970s. Jullien and Rey (2007) develop an
algebraic model in which resale price maintenance facilitates collusion among producers
because it makes deviations from the collusive scheme easier for the colluders to detect andcredibly deter, as explained by Telser. This seems to me to be the essence of the Japanesenewspaper cartel too.
1

Albrecht v., Herald Co., 390 U.S. 145 (1968).
6

Another collusive practice of the Japanese newspaper industry is the newspaper
holiday. On one particular Monday each month, the newspapers all refrain from issuing amorning and evening edition. The Japan Newspaper association defends this practice asneeded to give the newspaper distributors vacation days. This is absurd. By rotating work
shifts or deploying substitute workers newsdealers could permit vacations. The newspaper
holidays amount to a collusive restriction of industry output, for both distributors andpublishers. The fact that the newspaper holidays of the different papers are on the same daysis evidence of collusion among the newspaper companies. A rare instance of deviation is also
revealing. In February 2002, the Sankei Shimbun refrained from the practice of newspaper
holiday. The other papers publicly criticized Sankei but also themselves refrained fromholidays. Three months later the practice was reinstated, again with Sankei participating.
That deviation by Sankei triggered deviations by the others strongly suggests that thenewspaper holidays have the character of a prisoners’ dilemma, as is generally true of cartel
schemes.
My aim is to assess the actual increase in prices that can be attributed to collusive
behavior by the leading Japanese newspapers, and determine also the likely effects of thoseprice increases on profits, consumer surplus and newspaper content.

3.

Demand for Newspaper Subscriptions
I begin by describing random-parameter logit estimates of the demand for Japanesenewspaper subscriptions. The data for this estimation come from the Japan Readers and Area
Data (JREAD) survey conducted by Video Research Ltd.

This is a random-direct-dial

telephone survey conducted in March each year that profiles newspaper readers andsubscribers throughout Japan. The data are mostly used by advertisers. I purchased temporary
access to the 2007 survey with funds from a JSPS grant. From the 2007 edition of the survey(with some considerable effort) I collected micro data for the 27,788 respondents including
7

which edition of which newspaper each subscribes to if any, age and education of the head ofhousehold, household annual income, prefecture of residence, and whether the respondent
participates in local festivals and holiday events (a major focus of local community activity inJapan). I used these data to estimate a utility function that relates the respondents` choices ofnewspapers to characteristics of the newspapers. The data on newspaper characteristics
mostly come from the Japan Audit Bureau of Circulation (JABC), augmented with data from
Dentsu, Inc. These include in which prefectures each edition of each newspaper was available,
circulation, the subscription prices, number of pages of ads per month and number of pages ofcontent per month.

Although the data are cross-sectional for the single year 2007 and thesubscription price of each newspaper is geographically uniform, there does exist enoughvariation in the choice sets across prefectures (that is which newspapers in which editions areavailable for subscription), to estimate common parameters of an indirect utility function fornewspapers.
The basic econometric model is a multinomial logit model of utility with randomcoefficient on one variable, price of subscription. The utility of newspaper subscription
choice j by individual i is a linear function of (1) attributes of the choice, (2) interactions
between choice-invariant characteristics of the individual and attributes of the choice, and (3)an unobservable error 𝜀𝑖𝑗 that varies randomly across individuals and alternatives according to
the Gumbel distribution (Type I Extreme Value distribution). Stipulate also that the utility
function coefficient on price of subscription 𝑝𝑗 varies randomly across individuals according
to the Normal distribution2.
[1]

𝑈𝑖𝑗 = 𝛽 ′ 𝑥𝑖𝑗 + 𝛼𝑖 𝑝𝑗 + 𝜀𝑖𝑗
𝛼𝑖 = 𝛼 + 𝜎𝜐𝑖 , where 𝜐𝑖 ~ 𝑁𝑜𝑟𝑚𝑎𝑙 [0, 1]

Stipulating that the coefficient on price is distributed normally does allow the possibility ofpositive price coefficient but in the actual estimates all 27,788 individual price coefficients arenegative. I attempted estimates with price coefficient distributed lognormally but the estimates
did not converge. On the merits and demerits of lognormal versus normal distribution of randomparameters in mixed logit estimates see Hensher and Greene (2001).
82𝜀𝑖𝑗 ~ 𝐺𝑢𝑚𝑏𝑒𝑙
The individual i chooses from among his choice set

the one alternative with the greatest

utility value. The choice set includes any newspapers available for subscription in the place
where the person lives and the choice of subscribing to no newspaper at all (j=0). It will be
the case that 𝑥𝑖 = 0 and 𝑝 = 0, so by construction, the mean utility value of not subscribing
to any newspaper is zero: Ui0=0.
From the observed choice set of each individual, observed attributes of eachalternative, observed characteristics of each individual, and observed choice of each individual,
I estimate the parameters of the utility function that are common to all individuals 𝛽, 𝛼, 𝜎using the method of simulated maximum likelihood (computed with the software NLOGIT).3
The variables that enter the utility function are made up as follows.
Attributes of the newspaper subscription choices that do not vary across individuals:—Subscription price (units=yen per month) pj—Natural logarithm of number of pages of content per month (“news hole”)
Interactions between choice-invariant characteristics of the individual and attributes of the
choice (with units of measurement equal to underlined expressions where present, otherwise
equal to zero or one):—Age head of household (one of four discrete intervals) ×
1. Natural log of pages of content per month
2. National newspaper × morning-and-evening subscription

3

The probability that individual i chooses j is
𝜋𝑖𝑗 = ∫ ∑𝑒𝑥𝑝(𝛽 ′ 𝑥𝑖𝑗 + 𝛼+𝜎𝜐𝑖 𝑝𝑗)′
𝑘∈𝐶𝑖 𝑒𝑥𝑝(𝛽 𝑥𝑖𝑘 + 𝛼+𝜎𝜐𝑖 𝑝𝑗 )𝑓 𝜐𝑖 𝑑𝜐𝑖 ,where 𝑓 𝜐𝑖 is the density function of 𝜐𝑖 . The simulated approximate probability that individual i chooses j is𝑆𝜋̃𝑖𝑗 = 1/𝑆 ∑𝑠=1

𝑒𝑥𝑝(𝛽 ′𝑥𝑖𝑗 +(𝛼+𝜎𝜐𝑖 𝑠 )𝑝𝑗)∑𝑘∈𝐶 𝑒𝑥𝑝(𝛽 ′𝑥𝑖𝑘 +(𝛼+𝜎𝜐𝑖 𝑠 )𝑝𝑗)𝑖where 𝜐𝑖 𝑠 is the randomly drawn value of 𝜐𝑖 on simulation s and S is the total number of simulations (which I
set equal to 500). The simulated log-likelihood function is𝐽ℒ̃ = ∑𝑁̃ 𝑖𝑗 )
𝑖=1 ∑𝑗= 𝑑𝑖𝑗 𝑙𝑛(𝜋1 if individual 𝑖 chooses alternative 𝑗where 𝑑𝑖𝑗 = {0 otherwise
93. Local or Bloc newspaper × morning-and-evening subscription—Household annual income (one of sixteen discrete intervals ranging from zero to 30-million
yen or more per year) if greater than zero ×
1. Natural log of pages of content per month
2. National newspaper × morning-and-evening subscription
3. Local or Bloc newspaper × morning-and-evening subscription—Each national newspaper (Yomiuri, Asahi, Mainichi, Sankei) ×
1. Survey response: “Participates in local festivals and holiday events.”
2. Head of household highest education level is college or above—For each national and bloc paper, square of road distance (th. Km) from newspaper homebase to each individual’s prefecture of residence (home base for national papers Yomiuri,
Asahi and Mainichi: Tokyo, for Sankei: Osaka; and for bloc papers Chunichi: Aichi, Chugoku:
Hiroshima, and Nishi Nippon: Fukuoka).

Table 2 reports the utility function parameter estimates. Dividing the othercoefficients by the estimated marginal disutility of subscription price converts them tomonetary units (yen per month). From the estimates several things are evident. First, themarginal value of a page of content becomes less as income rises. Second, the value ofmorning-and-evening subscription rather than morning-only, holding constant pages of content
per month, is greater the greater the income, and is greater for national newspapers than forother newspapers. Third, the more distant is the prefecture of residence from the newspaper
home base the lower is its value. This effect is stronger for the bloc papers than for the national
papers. And among the national papers it is stronger for Sankei than for Asahi, Mainichi or
Yomiuri. Fourth, those who participate in local festivals and holiday events place a lower
value on subscription to national papers; this effect is strongest for Sankei. Fifth, college
education inclines subscribers to more value Asahi and less value Sankei.
Further interpretation of the estimates comes from simulations that expose the effects
on demand for each edition of each newspaper of changes in subscription price or changes in10number of pages of content. I computed arc elasticities and cross-elasticities of demand withrespect to changes in prices and pages of content, by simulating the effects of five-percent
increases in subscription prices of each edition of each newspaper and five-percent increases in
numbers of pages of content in each edition of each newspaper. These estimates may be foundin the Appendix tables A1 and A2. It seems that the price-elasticity of demand of most
newspapers lies between 1.2 and 2 and is a bit higher for the leading national papers than forthe others. The elasticity of demand with respect to pages of content lies between 0.2 and 0.5.
This matches some results of other estimates of demand for newspapers in the literature.
Van Cayseele and Vanormelingen (2009) estimate a pair of equations describing thedemand for ads and demand for subscriptions in Belgian newspapers. The demand forsubscriptions is specified as nested logit, in which readers first choose between subscription to
the local paper versus a national one, and then choose within the one category or the other.
Demand for subscriptions depends on the characteristics of newspapers and of readers, and on
the prices.

Van Cayseele and Vanormelingen find that the elasticity of demand forsubscriptions ranges from 1.25 to 3.05. Argentesi and Filistrucchi (2007) estimate a nested
logit specification for reader demand and simple logit specification for advertising demand for
Italys’ four national newspapers. In their preferred specification the newspapers set ad rates
noncooperatively but collude in setting cover prices. Fan (2011) estimates a multiple discrete
choice model of the demand for U.S. newspapers (a model in which demanders may subscribe
to more than one paper), with endogenous choice by newspapers of their quality and theirprices, including price of advertising. She uses the estimated model to simulate the effects ofmergers of local papers with overlapping markets.
Rosse (1970) estimates a set of equations approximately like the three pricing and content
rules implied by profit-maximization, using data for local newspapers across the US. Rosse
allows for curvature of the cost function (which the simple model here does not exhibit), andalso allows demand for subscriptions to depend directly on amount of ads. He finds a price11

elasticity of demand for subscriptions of 1.4, taking into account the effect of change insubscription price on amount of ads, as interpreted by Blair and Romano (1993). Rosse was
the first to notice that variation in demand across cities could be exploited as a kind of naturalexperiment in measuring the effect of shifting demand on the costs and pricing of local
newspaper monopolists. As far as I am aware this same principal has not yet been exploited in
the study of Japan’s local newspapers.

4. Newspaper Pricing and Content.
The next task is to model the subscription prices and advertising prices set byprofit-maximizing newspapers in a way that can be used to estimate parameters of thenewspaper cost function and establish benchmarks for assessing the effects of coordinatedpricing behavior by the leading Japanese newspapers. I begin by laying out a simple algebraic
framework for relating newspaper prices, circulation, advertising and content. Much of thiswill be familiar to students of newspaper economics. Similar models have been sketched in
Rosse (1970), Blair and Romano (1993), Van Cayseele and Vanormelingen (2009), andelsewhere. Here I adapt the framework for analysis of the Japanese newspaper industry.
For my purpose, it is necessary to accommodate newspapers that offer their readers achoice between a morning-only subscription and a morning-and-evening subscription.4 Let s1
denote the number of morning-only subscribers to the newspaper and s2 be the number ofmorning-and-evening subscribers. And denote by km and am the pages of content and ads in themorning edition, and by ke and ae the pages of content and ads in the evening edition. Here an
ad is defined as a printed item supplied to all subscribers, the same as the subscription content.
The only difference is that the ad is paid for by the advertiser but the other content is paid for by
the subscribers.
Virtually none proffer evening-only subscriptions. The Shizuoka Shinbun claims to offer achoice between evening-only subscription and morning-and-evening subscription but based on
circulation data, hardly any of their subscribers opt for evening-only.
12
4

Let us suppose that the demand for ads depends on the price to place an ad per𝑝𝑎𝑚
subscriber, 𝑠 +𝑠
1

2

if in the morning edition or𝑝𝑎𝑒𝑠2

if in the evening edition. Let us also

suppose that the readers regard the ads indifferently.

To keep matters simple, posit a

constant-elasticity demand system facing the newspaper in which all elasticities have theappropriate signs and lie within the unit interval:
Demand by morning-only subscribers:[2]

𝑠1 = 𝐴1 𝑝𝑠1 −ξ1 𝑝𝑠2 ξ12 𝑘𝑚 𝜃1𝑚 𝑘𝑚 + 𝑘𝑒 𝜃1𝑒Demand by morning-and-evening subscribers:[3]

𝑠2 = 𝐴2 𝑝𝑠2 −ξ2 𝑝𝑠1 ξ21 𝑘𝑚 𝜃2𝑚 𝑘𝑚 + 𝑘𝑒 𝜃2𝑒Demand for ads in morning edition:[4]

𝑎𝑚 = 𝐵𝑚 (𝑝𝑎𝑚

𝑠1 +𝑠2)−ξ𝑎Demand for ads in evening edition[5]𝑝𝑎

𝑎𝑒 = 𝐵𝑒 ( 𝑠 𝑒 )−ξ𝑎2

Let the cost of newspaper production depend on number of ads and circulation and on
amount of content. These costs include first-copy costs and costs that depend on the numberof subscriptions of each type:𝑓𝑖𝑟𝑠𝑡−𝑐𝑜𝑝𝑦 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑎𝑑 𝑝𝑎𝑔𝑒𝑠

[6]

=

⏞
𝑓𝑎 𝑎𝑚 + 𝑓𝑎 𝑎𝑒

𝑓𝑖𝑟𝑠𝑡−𝑐𝑜𝑝𝑦 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑐𝑜𝑛𝑡𝑒𝑛𝑡 𝑝𝑎𝑔𝑒𝑠+⏞
𝑓 𝑘 𝑘𝑚 + 𝑓 𝑘 𝑘𝑒

𝑐𝑜𝑠𝑡𝑠 𝑡ℎ𝑎𝑡 𝑑𝑒𝑝𝑒𝑛𝑑 𝑜𝑛 𝑚𝑜𝑟𝑛𝑖𝑛𝑔−𝑜𝑛𝑙𝑦 𝑠𝑢𝑏𝑠𝑐𝑟𝑖𝑝𝑡𝑖𝑜𝑛𝑠⏞(𝑐 𝑚 + 𝑐̅ 𝑎𝑚 + 𝑘𝑚 )𝑠1+

𝑐𝑜𝑠𝑡𝑠 𝑡ℎ𝑎𝑡 𝑑𝑒𝑝𝑒𝑛𝑑 𝑜𝑛 𝑚𝑜𝑟𝑛𝑖𝑛𝑔−𝑎𝑛𝑑−𝑒𝑣𝑒𝑛𝑖𝑛𝑔 𝑠𝑢𝑏𝑠𝑐𝑟𝑖𝑝𝑡𝑖𝑜𝑛𝑠⏞(𝑐 𝑚 + 𝑐 𝑒 + 𝑐̅ 𝑎𝑚 + 𝑘𝑚 + 𝑎𝑒 + 𝑘𝑒 )𝑠2+

Here, 𝑐 𝑚 and 𝑐 𝑒 are the unit cost of distribution in morning and in evening net ofadvertisers’ payments to distributors for including inserts (substantial in Japan, almost as large
as advertisers’ payments to newspapers for print ads). 𝑐̅ is the cost per page of actually
printing the newspaper (where k and a are the numbers of pages of content and of ads), fk is thefirst-copy cost of producing a page of content and fa is the first-copy cost of producing a page ofadvertising. Notice that because of the terms 𝑐̅𝑎𝑚 𝑠1 + 𝑠2 and 𝑐̅𝑎𝑒 𝑠2 in the cost function,
the costs are not separable into cost of subscription and cost of advertising. This makes it
problematic to speak separately of the profits from subscriptions and from advertising.
13

Most newspaper advertising in Japan is contracted through advertising agencies, ofwhich Dentsu is the largest. The advertiser pays the ad agency the price set by the newspaper
but the ad agency pays a lower price to the newspaper.

In the empirical estimates below I

will take the publically posted advertising rates of the newspapers to be the prices actually
paid by clients but consider the advertising prices received by the newspapers (which I do not
observe) to be a set fractionof these prices, the difference representing the advertising

agency commission (The commission rate is 1 −0 ).

The newspaper chooses content, prices of ads, and prices of subscriptions to maximize
total profit:
𝑟𝑒𝑣𝑒𝑛𝑢𝑒 𝑟𝑜𝑚
𝑎𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔

𝑟𝑒𝑣𝑒𝑛𝑢𝑒 𝑟𝑜𝑚
𝑠𝑢𝑏𝑠𝑐𝑟𝑖𝑝𝑡𝑖𝑜𝑛𝑠

a 𝑝 ,𝑝𝑎, 𝜋 = ⏞𝑝𝑠1 𝑠1 + 𝑝𝑠2 𝑠2 + ⏞𝑝𝑎𝑚 𝑎𝑎𝑚 + 𝑝𝑎𝑒 𝑎𝑎𝑒 −[7]

The necessary conditions for maximum profit reduce to the following pricing rules:
Prices of ads:[8]

𝑝𝑎𝑚 = (𝑓𝑎 + 𝑐̅ 𝑠1 + 𝑠2 )[9]𝑝𝑎𝑒 = 𝑓𝑎 + 𝑐̅𝑠2

−1

−1

1 −1

(1 − ξ )𝑎

1 −1(1 − ξ )𝑎

Prices of subscriptions5 :1

𝑝𝑎𝑚 𝑎𝑚1

𝑠1 +𝑠2(1 − 𝜆 ) 𝑝𝑠1 = 𝑐 𝑚 + 𝑐̅ 𝑎𝑚 + 𝑘𝑚 −

[10]

5

The subscription prices ps are set as though the newspaper were receiving a subsidy per subscriber equal

to the marginal profit that arises indirectly from advertising with each copy sold (for given price of advertising pa):
𝑝𝑎 𝑎 − 𝑓𝑎 𝑎 − 𝑐̅𝑎𝑠
𝑎

𝑎
+
𝑠

𝑝𝑎 𝑎 − 𝑓𝑎 𝑎 − 𝑐̅𝑎𝑠=𝑠𝑝𝑎 − 𝑓𝑎 − 𝑐̅𝑠=𝑝𝑎 − 𝑓𝑎 − 𝑐̅𝑠

=

𝑝𝑎 𝑎
𝑠

𝑎
− 𝑐̅𝑎
𝑠
𝑝𝑎 𝑎
𝑠

− 𝑐̅𝑎

− 𝑐̅𝑎

This marginal profit equals the marginal revenue that arises indirectly from advertising (= paa/s), minus theadded-cost-per-copy attributable to advertising (=𝑐̅𝑎).
14

[11]

1

𝑝𝑎𝑚 𝑎𝑚2

𝑠1 +𝑠2(1 − 𝜆 ) 𝑝𝑠2 = 𝑐 𝑚 + 𝑐 𝑒 + 𝑐̅ 𝑎𝑚 + 𝑘𝑚 + 𝑎𝑒 + 𝑘𝑒 −−𝑝𝑎𝑒 𝑎𝑒
𝑠2

where
[12]

1
𝜆1

=

𝑝
ξ
(1+( 2 2 ) 21 )𝑝 1 1 ξ2ξ ξ
(ξ1 − 12 21 )
ξ2

=

1

1

if ξ12 = 0 .

1

if ξ21 = 0

and
𝑝

[13]

1
𝜆2

=

𝑠

ξ

(1+( 𝑠1 1 ) 12 )𝑝𝑠2 𝑠2 ξ1
ξ12 ξ
21
(ξ2 −
)
ξ1

=

2

These expressions [12] and [13] capture cross-effects, as when the newspaper
raises the price of morning-only subscriptions to increase the demand formorning-and-evening subscriptions.

Table 3 lists the estimates of 𝜆1 , 𝜆2 andother related parameters based on the arc elasticities computed from simulations
using the mixed-logit utility function estimate. The mean value acrossnewspapers (in the penultimate row of the table) shows that 𝜆1 and 𝜆2 average

1.4 and 1.3, slightly lower than 𝜉1 and 𝜉2 which average 1.6 and 1.8. This
reflects the

positive crosselasticity of demand between morning-only

subscriptions and morning-and-evening subscriptions to the same newspaper (𝜉12and 𝜉21 which average 0.4). I would expect that newspapers would raise
subscription prices slightly to exploit this cross effect based on Equations [10] and[11].
The profit-maximizing pages of content 𝑘𝑚 and 𝑘𝑒 fulfill the following:

[14]

[15]

( 𝑘 +𝑐̅ 𝑠1 +𝑠2 ) 𝑚
𝑝 1 𝑠1𝑘 +𝑐̅𝑠2𝑚+

𝑝 2 𝑠2𝑒=(𝜃1𝑚 +(𝑘𝑚)𝜃
𝑘𝑚 + 𝑘𝑒 1𝑒

𝜆1

𝜃

𝑝 𝑠

𝜃2𝑚 +()+(

𝑘𝑚)𝜃
𝑘𝑚 + 𝑘𝑒 2𝑒

𝜆2

𝑝 𝑠

) 𝑝 2 𝑠2
1 1

𝜃= 𝜆1𝑒 (𝑝 1 𝑠1 ) + 𝜆2𝑒
1

2 2

2

These expressions (showing cost of content relative to subscription revenues) lookcomplicated but have a close relation to the Dorfman-Steiner rule for advertising, most evident
for the single-edition case:
15

[16]

𝑘 +𝑐̅𝑠1𝑚

𝑝 1 𝑠1𝜃= 1𝑚
1This expression resembles the Dorfman-Steiner condition describing optimal advertisingexpenditure. This is because, analytically, the model here is the same as the Dorfman-Steiner
advertising model: Demand for subscriptions has constant elasticity 0

𝜃1𝑚

1

with

respect to content, just as in the Dorfman-Steiner model demand for the product has constantelasticity with respect to quantity of ads.
The last columns of Table 3 show the arc elasticities of demand with respect topages of content from the mixed-logit utility function estimate.

The last twocolumns show the imputed cost of content relative to subscription revenue basedon Equations [14] and [15].

Multiplying these amounts (right-hand-sides ofEquation [14] and [15]) by the subscription prices 𝑝𝑠1 and 𝑝𝑠2 leads toexpressions for content cost per subscriber that, based on [14] and [15], can be1

regressed on the reciprocal of number of subscribers

𝑠

(≡

1
𝑠1

or

1
𝑠2

), and on pagesof content properly weighted k (≡𝑚 𝑠1 +𝑠2

cost parameters

The result of that OLS regression is the𝑓and 𝑐̅ .

𝑠1

or

𝑘𝑚 + 𝑘𝑒 ), to reveal estimates offollowing:[17] 𝑐𝑜𝑛𝑡𝑒𝑛𝑡 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑠𝑢𝑏𝑠𝑐𝑟𝑖𝑏𝑒𝑟 =1𝑐̅ × 𝑘1× 𝑘

𝑓 × (𝑠 ) += 2.2 million yen × (𝑠 ) + 0.96 yen per page
s.e.

(5.2)

( 0.05)2

R =0.92 , n=62

The first-copy costs are not precisely identified by this regression. Perhaps they vary greatly
across newspapers.

The per-copy cost of actually printing a page of content 𝑐̅ is precisely

estimated and seems to be just under one yen per page.
16

It is useful to compare this estimate

with the subscribers’ marginal valuations of content pages based on the utility function
estimate. Figure 2 shows these marginal valuations averaged across subscribers for each
edition of each newspaper plotted against monthly pages of content, km if a morning
subscription, km+ke if morning-and-evening. The marginal values decrease as pages increase
which reflects the diminishing marginal valuation of each person and self-selection ofnewspapers with more content by those with higher marginal valuation (because of theirhigher income for instance). The marginal value of content for the newspapers with mostpages of content (large circulation morning-and-evening editions) are fairly close to one yen
per page, actually a bit below that.

This is consistent with the “efficiency at the top”

character of nonlinear pricing schemes as deduced in Mussa and Rosen (1978).

The

profitable strategy is to supply the efficient quality of content to the higher valuing
morning-and-evening subscribers but supply less than the efficient content to themorning-only subscribers to deter subscribers from switching from morning-and-evening tomorning-only.

I explore this aspect of Japanese newspaper behavior in more detail in Flath(2012). My point here is that the estimated marginal value of content to subscribers is
consistent with per-copy cost of actually printing a page of content 𝑐̅ of just under one yen
per page

4.1. Price of advertising and demand for advertising
Within the basic framework, much of the variation in price of advertising acrossnewspapers can be related to variation in number of subscribers. The price of ads (not per
subscriber) varies linearly with number of subscribers. The equations [8] and [9] can bepooled into a single equation:[17]

𝑝𝑎 = 𝑓𝑎−1

1 −1(1 − ξ )where 𝑝𝑎 = 𝑝𝑎𝑚 or 𝑝𝑎𝑒 ,

𝑎

+ 𝑐̅

−1

1 −1

(1 − ξ )𝑎𝑠

𝑠 + 𝑠2 , 𝑖𝑓 𝑝𝑎 = 𝑝𝑎𝑚and 𝑠 = { 1𝑠2, 𝑖𝑓 𝑝𝑎 = 𝑝𝑎𝑒
17

Newspapers with greater circulation, all else the same, have higher ad prices:
[18]

𝑑𝑝𝑎

= 𝑐̅
𝑑𝑠

−1

1 −1

(1 − ξ )𝑎0,but lower ad prices per subscriber:𝑝[19]𝑑( 𝑎 )
𝑑𝑠

= −𝑓𝑎

−1

1 −1 −2(1 − ξ )𝑎𝑠0

It is possible that elasticity of demand for advertising varies from one newspaper to another.
But it turns out that much of the actual variation in ad pricing across Japan’s local newspapers
is linearly related to number of subscribers, as implied by the model just described andassuming that the elasticity of demand for advertising is the same for all newspapers.
Table 4 reports OLS regressions in which newspaper ad pricing is a linear function of
circulation as in equation [17]:
[20]

𝑝𝑎 =

+

1𝑠 +

There are four different prices, so four separate regressions. The dependent variable in theleft-most regression of the table is the price for a legal notice posted in the society page per
centimeter width of a horizontal column (dan in Japanese). This is the basic plain-vanilla adrate that is the anchor for each newspaper’s menu of ad prices. The dependent variables in theother three Table 3 regressions are contract prices per horizontal column for black-and-whitebusiness display ads. These vary depending on whether the contract is for one, five or fifteen
horizontal columns, within a six-month period. A page is divided into fifteen horizontal
columns, so these are prices for one-fifteenth page, one-third page or one page, cumulatively
within the contract period. The rate for ads smaller than one horizontal column is the same as
for a legal notice and is priced per horizontal column per centimeter width. A (Yomiuri
Shimbun) page is 37.9 cm wide. A (perhaps typical) small ad might amount to one halfcolumn (in other words 1/30th of a page), and so its price would be 18.95 x the price per
centimeter portion of a horizontal column for a legal notice. The regressions use 2007
circulation, but 2003 was the year in which the prices were last changed; they have remained18

the same in the nine years since then. The unit of observation is the particular edition of each
paper. Some of the observations are for ads placed in more than one regional edition of anational newspaper. For these I aggregated the circulation over the regional editions covered.
With those observations excluded, Chow tests favored the pooling of national and local papers.
Chow tests favored pooling of morning and evening editions even with those observations
included. The estimates reported in Table 4 are for the pooled sample.

The R-squared is0.89 for legal notice and 0.90 for the business display ads. It seems that the basic frameworkadequately describes the newspaper advertising cost function and the ad pricing behavior ofnewspapers. That is, the newspapers each face a similar elasticity of demand for advertisingand have similar first-copy costs of supplying advertising. The newspapers with greater
circulation have correspondingly lower incremental costs and so set lower prices.

Picard(1998) notes an approximately similar pattern in the advertising rates of U.S. newspapers.
To estimate the demand for newspaper advertising requires instrumental variables foradvertising price because of possible endogeneity. In my way of thinking here, the newspaper
circulation determines the incremental cost per page of ads, and so given constant elasticity ofdemand for advertising, circulation also determines the profit-maximizing price of advertising
per page of ads. But the demand for ads depends on the price per page of ads per subscriber.
The fundamental endogeneity in ad price per subscriber arises from the effects of subscription
price on number of subscribers. Using instrumental variables for circulation resolves thisendogeneity. My instruments for circulation s are the number of households in the newspaper
home prefecture if it is a local or bloc newspaper, a dummy variable if it is a national
newspaper, and number of pages of content per month. Because greater circulation lowers theincremental cost of pages of content, number of pages of content is a valid instrument forcirculation (It is inversely correlated with circulation). I estimate the following pair ofequations with the generalized method of moments, using SAS software:
Equation 1—Advertising price per page of ads:
19

𝑝𝑎 =

[21]

+

1𝑠

Equation 2—Demand for advertising:ln 𝑎 = 𝛽 + 𝜉𝑎 𝑙𝑛

[22]

/𝑠 +

1

+ 𝛽1 ln 𝐴 𝑔 𝑛𝑐𝑜𝑚𝑒 + 𝛽2 𝑐𝑛𝑡 𝑜𝑙𝑙𝑒𝑔𝑒

Instruments for s: (1) pages of content per month, (2) newspaper home prefecture number ofhouseholds if bloc newspaper or local newspaper, (3) dummy=1 if national newspaper and =0
if not.

AvgIncome is average annual household income of subscribers to the newspaper and

PcntCollege is the percent of the subscribers to the newspaper that have a college education.
From the estimates which are in Table 5, the elasticity of demand for advertisingappears to be about 1.3 with a standard error of 0.6. This seems about right, close to thecorresponding estimate for Belgian newspapers (=1.5) reported by Van Cayseele and
Vanormelingen (2009), and the estimate for U.S newspapers (=1.6) by Rosse (1970). There
are three pairs of regressions in Table 2. The dependent variables in the demand equations are
the business display ad rates per page of ads divided by circulation, for 1-dan, 5-dan and
15-dan contracts. All three regressions are similar.
From the Table 5 regressions we can glean some information about the first-copy
cost of a page of advertising 𝑓𝑎 , the cost per subscriber of actually printing and distributing a
page of ads 𝑐̅, and the advertising agency commission rate 1 − .

If elasticity of demand

for advertising 𝜉𝑎 is around 1.3 as here estimated, then first-copy cost of a page ofadvertising is
1

𝑓𝑎 =

1

1 2 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 𝑦𝑒𝑛 𝑝𝑒𝑟 𝑝𝑎𝑔𝑒 × (1 − 1 ) = 0 𝑚𝑖𝑙𝑙𝑖𝑜𝑛 𝑦𝑒𝑛 𝑝𝑒𝑟 𝑝𝑎𝑔𝑒

(1 − ξ )
𝑎

and
𝑐̅

−1

=

1
1 (1 − ξ )𝑎1

𝑦𝑒𝑛 𝑝𝑒𝑟 𝑝𝑎𝑔𝑒 𝑝𝑒𝑟 𝑠𝑢𝑏𝑠𝑐𝑟𝑖𝑏𝑒𝑟 × (1 − 1 ) =1 𝑦𝑒𝑛 𝑝𝑒𝑟 𝑝𝑎𝑔𝑒 𝑝𝑒𝑟 𝑠𝑢𝑏𝑠𝑐𝑟𝑖𝑏𝑒𝑟

From my earlier estimate that 𝑐̅ is just below one yen per page, this suggests that
implying an ad agency commission rate of 30 percent.
20

0.7

A widely repeated claim in both

Japan and the US is that the standard ad agency commission rate for newspaper advertising is
15 percent. Presuming the other parameter estimates are accurate, that might suggest that theelasticity of demand for advertising is around 1.2 rather than 1.3 which is of course plausible.
I don’t really know.
I next turn to a major focus of my effort, the pricing of subscriptions.

4.2. Price of subscriptions.
Under the Japan Fair Trade Commission special directive each newspaper is obliged
to set geographically uniform prices but need not set the same price as rival newspapers.
Nikae (2010) usefully points out that the legally mandated geographic uniformity can itself
lead to softer price competition. This is not part of my analysis. My focus here is on thecollusive setting of a common price.
My conjecture, which could be mistaken, is that the Japanese newspapers that all set
the same common price per morning-and-evening subscription of 3,925 yen per month whichis the highest price set by any in my sample, and morning-subscription price of 3,007 yen permonth which is also the highest of any in my sample, are colluding. These newspapers
include the three national newspapers Asahi, Mainichi, Yomiuri,6 and 11 local newspapers.
That leaves 33 other newspapers setting lower prices.

The Shizuoka Shimbun is the largest

circulation local newspaper with a subscription price below that of the national dailies.

Itsmorning-and-evening subscription price is 2,900 yen per month and its circulation tops
700,000. My strategy is to estimate an equation explaining the subscription prices of the 33
low-pricing newspapers and use that equation to predict out-of-sample the subscription pricesof the high-pricing newspapers. A comparison of the predicted prices with the actual prices
measures the effect of the resale price maintenance collusion.

It is possible that even theThough the morning-and-evening subscription price of the other national paper Sankei is 3,925
yen per month, its morning-only subscription price is 2,950 yen per month,.
21
6

low-pricing newspapers are parties to collusion in which case this strategy would fail.
Because my sample for this exercise is small I will take a step to broaden it slightly.
The step is to make the unit of observation the particular edition of a newspaper, either themorning edition with subscription price 𝑝𝑠1 , evening edition with incremental price𝑝𝑠2 − 𝑝𝑠1 , or morning-and-evening edition (for the eight newspapers in the sample onlyoffered as morning-and-evening) with subscription price 𝑝𝑠2 .
The estimating equation is based on Equations [10] and [11] as follows.

Morning edition:1

𝑝𝑎𝑚 𝑎𝑚1

𝑠1 +𝑠2(1 − 𝜆 ) 𝑝𝑠1 = 𝑐 𝑚 + 𝑐̅ 𝑎𝑚 + 𝑘𝑚 −[23]

Evening edition, if morning-only subscriptions are also offered:11

𝑝𝑎𝑒 𝑎𝑒21𝑠2(1 − 𝜆 ) 𝑝𝑠2 − (1 − 𝜆 ) 𝑝𝑠1 = 𝑐 𝑒 + 𝑐̅ 𝑎𝑒 + 𝑘𝑒 −[24]

Morning-and-evening edition ,if morning-only subscriptions are not offered:1

𝑝𝑎𝑚 𝑎𝑚2𝑠2(1 − 𝜆 ) 𝑝𝑠2 = 𝑐 𝑚 + 𝑐 𝑒 + 𝑐̅ 𝑎𝑚 + 𝑘𝑚 + 𝑎𝑒 + 𝑘𝑒 −

[25]

−

𝑝𝑎𝑒 𝑎𝑒𝑠2

The dependent variable in the regression is the left-hand side of equation [23], [24] or [25],which one depending on whether the observation is for a morning edition, evening edition, or
morning-and-evening edition of a newspaper that does not offer morning-only subscriptions.
These variables are constructed from the subscription prices and from the estimates of λ1 andλ2 based on the arc elasticities computed from the mixed-logit estimate of utility. These
dependent variables in the regression average around one fourth the amounts of thecorresponding subscription prices. Some observations had to be dropped from the sample
because of implausible values of elasticities. There were 51 useable observations in thesample.
The explanatory variables are (1) advertising revenue per subscriber which isconstructed by multiplying number of pages of ads per month times the posted price persubscriber (I used the 1-dan rate because it had fewer missing observations than the other ad
rates), (2) dummy variables for morning-delivery or evening delivery, and (3) total number ofpages per month including both content and ads.

I also include dummy variables equal to

one if the newspaper is among those setting the highest prices (3,925 yen per month formorning-and evening subscription and 3,007 yen per month for morning-only subscriptions),
to test for effects of coordinated pricing.
22The results of the OLS regression are reported in Table 6. The coefficient on numberof pages is 0.6 with standard error of 0.4, broadly consistent with the other evidence thatprinting costs 𝑐̅ for both ads and content lie just under one yen per page. The coefficient on
advertising revenue per subscriber is negative as expected but small, equaling -0.09 withstandard error 0.05.

If, as seems to be the case, the elasticity of demand for advertising isonly slightly above one (say 1.2 or 1.3) and elasticity of demand for subscriptions is less than2, then ad revenue per subscriber is not very sensitive to changes in the subscription price andso it is unsurprising that ad revenue per subscriber would have little power in the regression
explaining subscription prices.
From the other coefficients it seems that the cost of delivery is 475 yen per month permorning subscriber and 241 yen per month per evening subscriber. But the coefficient for
evening delivery is imprecisely estimated.
Finally, the dummy variables for capturing the effects of coordinated pricing show thatthe newspapers that set 3,925 yen per month for morning-and-evening and 3,007 yen per
month

for

morning-only subscriptions

seem

to

be

setting

substantially higher

morning-and-evening prices, but lower morning-only prices, than the other variables would
predict. I hasten to add that the coefficient on the morning-edition coordinated pricing
dummy is very imprecisely estimated and not nearly statistically significant.

The dependent

variable in this regression tends to be about one fourth as great as the corresponding
subscription price (p1 for morning edition and p2-p1 for evening edition). That means theeffect of coordinated pricing seems to be to raise the morning price little if at all but raise themorning-and-evening price by about 400 yen (≈4×(209—96)) from about 3,525 yen permonth to 3,925 yen per month. In short, there is evidence here that the leading Japanesenewspapers are indeed pricing collusively.

But it is very difficult to judge by exactly how

much the subscription prices are affected by this collusion.
I next calculate the effects on consumer surplus and newspaper profits of an end tocollusive pricing starting with an assumption about how subscription prices would change if
the special exemption from antimonopoly prohibition against resale price maintenance wererevoked and coordinated pricing ended.

For this calculation, let us suppose that thenewspapers now setting morning-and-evening prices of 3,925 yen per month and morning
prices of 3,007 yen per month were to lower these by 340 yen per month and 140 yen permonth, to 3,585 yen per month and 2,867 yen per month.
newspapers keep prices unchanged.

Suppose also that the other

From simulation using the mixed-logit utility estimate
23

of newspaper demand it turns out that these price reductions would confer an averageincrease in consumer surplus of 126 yen per month per household. This is the average
difference in mean utility under the two scenarios divided by the utility of a one-yen pricedecrease (equal to the absolute value of the estimated coefficient on price), as in Small andRosen (1981). Totaled over all households this would equal about 7.6 billion yen per month(91.2 billion yen per year, roughly $1-billion per year).

It would increase total subscriptionsof all newspapers by about 0.7 percent, which would have little effect on the demand fornewspaper ads. Much of the shift in subscriptions would be from morning-only tomorning-and-evening subscriptions of the same newspaper, rather than switching between
national and local papers. It would reduce revenue from subscriptions by 46.4 billion yen per
year.

Further calculations imply that this would decrease newspaper profit by about 5.3

billion yen per year (3.9 billion yen per year among the collusive newspapers and 1.4 billion
yen per year among the non-collusive newspapers).

The net increase in social welfare

would thus amount to 91.2-5.3=85.9 billion yen per year. The calculation for profit is basedon the following and ignores any change in number of pages of content or ads.
From equations [8], [9], [10] and [11], the profit of each newspaper company is
[26]

𝜋=

𝑝 1 𝑠1
𝜆1+

𝑝 2 𝑠2
𝜆2− 𝑓𝑎 𝑎𝑚 + 𝑎𝑚𝑒 − 𝑓 𝑘𝑚 + 𝑘𝑒 .

Collusive price-setting operates as though λi were adjusted downward slightly to λi′ say,below the level implied by equations [12] and [13], which raises the first two terms on theright-hand side of equation [26], increasing profit. An end to collusive price setting reverses
this, and lowers profit.

Using the estimated values of λ1 and λ2 and imputing the cartel

pricing adjustment from
[27]

1

1

𝑝𝑐𝑎𝑟𝑡𝑒𝑙 (1 − λ′ ) = 𝑝𝑛𝑜 𝑐𝑎𝑟𝑡𝑒𝑙 (1 − 𝜆) ,the change in profit caused by reversion from collusive pricing to non-collusive is revenue
divided by the corresponding adjustment factor, λi or λi′, differenced.

All of this assumes

that no newspapers would go out of business and that total costs of production would be little
affected.

5. Conclusion.
Japan’s leading national newspapers and eleven of the largest regional and local
papers, protected by a special 1953 exemption from antimonopoly law, have persistently kept
their monthly subscription prices at the same common level, which is higher than the24subscription prices of the other newspapers with whom they compete.

To assess the effectsof this requires two things. The first is knowing how the prices would differ in the absence of
coordinated pricing, abetted by the special exemption. That turns out to be very difficult.
Despite my best efforts I am only able to venture an educated guess.

Based on comparisonof the prices of the newspapers setting a higher price in common with one another with theprices of the others, and controlling for number of pages per month and advertising revenue
per subscriber, it seems to me that the collusive price increase amounts to no more thanaround ten percent of the observed common price level of the high pricers.

A challenge forfurther study is to reach a more precise judgment about this, or even to overturn it.
The other thing needed to assess the effects of collusive pricing by Japanesenewspapers is an econometric model of the demand for each newspaper and of the relevant
parameters of the cost of producing and distributing newspapers.
constructing and estimating such a model using micro-data.

This is done here by

I estimate the parameters of an

indirect utility function, based on the survey responses of 27,788 persons living throughout
Japan in March 2007.

From the estimates of utility function parameters I infer arc

elasticities and cross elasticities of demand with respect to subscription prices and pages ofcontent. Similar kinds of estimates but using aggregate data rather than micro-data havebeen used by others to assess the unilateral effects of mergers in the newspaper industries of
the U.S. (Fan, 2011), and the Netherlands (Filistrucchi, Klein and Michielsen, 2012). Here I
perform an opposite kind of analysis by simulating the effects of a reduction in pricecoordination among newspapers rather than an increase in coordination.

I find that if an end

to price coordination were to lower the prices of the affected newspapers by about ten percent,it would add 91.2 billion yen per year (about 1 billion dollars per year), to the consumer
surplus of newspaper subscribers, but would decrease newspaper profit by only about 5.3
billion yen per year (3.9 billion yen per year among the collusive newspapers and 1.4 billion
yen per year among the non-collusive newspapers).
25

Appendix 1. Data sources:

Pages of Ads, Total Pages:
Dentsu Inc. (Annual a). Dentsuu koukoku nenkan (Dentsu advertising annual), Dentsu.
Dentsu Inc. (Annual b). Dentsuu shinbun nenkan (Dentsu newspaper annual), Dentsu.

Subscription Prices, Circulation:
Japan Audit Bureau of Circulation, shinbun hakkousha repooto (Report on newspaper
publishers), Nihon ABC kyoukai, semi-annual. 2007, and 2007 July-December, Jan-June.

Prices of Advertising:
Koukoutantou.com. Website http://www.koukokutantou.com/newspaper_1.html

Survey of Newspaper ReadersVideo Research Ltd., Japan Readers and Area Data (JREAD) Survey conducted in March
2007.

26

0.11

0.08

0.06

0.10

0.27

0.17

0.13

0.33

0.13

0.00

0.13

0.00

0.00

0.00

0.10

KYOTO SHIMBUN morning + evening

0.00

KYOTO SHIMBUN morning

THE JOMO SHINBUN

0.13

THE CHUNICHI SHIMBUN morning + evening

SHIMOTSUKE SHIMBUN

0.09

THE CHUNICHI SHIMBUN morning

THE IBARAKI SHIMBUN

0.10

SHIZUOKA SHIMBUN morning + evening

FUKUSHIMA MINYU

0.31

GIFU SHIMBUN morning + evening

FUKUSHIMA MINPO

0.17

0.10 -0.13 -0.09

0.09

0.07

0.08

0.13

0.08

GIFU SHIMBUN morning

YAMAGATA SHIMBUN morning + evening

0.17

SHINANO MAINICHI SHIMBUN morning + evening

AKITA SAKIGAKE SHIMPO morning + evening

0.18

SHINANO MAINICHI SHIMBUN morning

THE KAHOKU SHIMPO morning + evening

0.17

YAMANASHI NICHINICHI SHIMBUNTHE KAHOKU SHIMPO morning

0.11

THE NIKKAN KENMIN FUKUITHE IWATE NIPPO morning + evening

0.27

FUKUI SHIMBUNDAILY TOHOKU

0.11

THE HOKURIKU CHUNICHI SHIMBUN morning +TOO NIPPO morning + evening

0.13

THE HOKURIKU CHUNICHI SHIMBUN morning

HOKKAIDO SHIMBUN morning + evening

0.00

THE HOKKOKU SHIMBUN morning + evening

HOKKAIDO SHIMBUN morning

0.10

THE HOKKOKU SHIMBUN morning

SANKEI SHIMBUN morning + evening

0.07

KITANIPPON SHIMBUN morning

SANKEI SHIMBUN morning

0.10

NIIGATA NIPPO morning + evening

YOMIURI SHIMBUN morning + evening

0.06

NIIGATA NIPPO morning

YOMIURI SHIMBUN morning

0.09

KANAGAWA SHIMBUN

MAINICHI SHIMBUN morning + evening

0.06

THE TOKYO SHIMBUN morning + evening

MAINICHI SHIMBUN morning

0.09

THE TOKYO SHIMBUN morning

THE ASAHI SHIMBUN morning + evening

Id.
No.

THE ASAHI SHIMBUN morning

Table A1. 2007 Elasticity of Demand with Respect to Price (arc elasticities based on five percent increase in price of row newspaper)

Newspaper
1 THE ASAHI SHIMBUN morning-1.81 0.15 0.18 0.09 0.28 0.14 0.09 0.03 0.01 0.01 0.01 0.01 0.02 0.02 0.02 0.02 0.02 0.01 0.01 0.01 0.01 0.01 0.07 0.04 0.01 0.01 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.04 0.02 0.01 0.01
2 THE ASAHI SHIMBUN morning + evening
0.24 -2.15 0.14 0.17 0.23 0.24 0.08 0.04 0.01 0.02
0.00 0.01 0.01 0.12 0.06 0.02
0.02
0.02 0.02 0.01 0.05 0.04 0.01 0.01
13 MAINICHI SHIMBUN morning
0.28 0.15 -1.88 0.10 0.28 0.14 0.11 0.04 0.01 0.02 0.02 0.01 0.03 0.02 0.02 0.03 0.03 0.02 0.02 0.01 0.01 0.01 0.08 0.04 0.01 0.02 0.02 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.04 0.02 0.01 0.01
14 MAINICHI SHIMBUN morning + evening
0.23 0.27 0.17 -2.25 0.23 0.23 0.10 0.06 0.02 0.02
0.02 0.02 0.02 0.12 0.08 0.02
0.02
0.02 0.02 0.02 0.06 0.04 0.02 0.02
25 YOMIURI SHIMBUN morning
0.27 0.14 0.17 0.09 -1.81 0.14 0.09 0.02 0.01 0.01 0.01 0.01 0.02 0.01 0.01 0.02 0.02 0.01 0.01 0.01 0.01 0.01 0.07 0.04 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.04 0.02 0.01 0.01
26 YOMIURI SHIMBUN morning + evening
0.23 0.25 0.14 0.16 0.23 -2.16 0.08 0.05 0.03 0.03
0.01 0.01 0.01 0.13 0.08 0.01
0.03 0.01 0.01 0.01 0.01
0.03
0.01 0.01 0.01 0.03 0.03
49 SANKEI SHIMBUN morning
0.27 0.15 0.22 0.13 0.27 0.15 -1.89 0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.02 0.00 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.02 0.02 0.00 0.00 0.00 0.00 0.02 0.02 0.05 0.02 0.02 0.02
50 SANKEI SHIMBUN morning + evening
0.20 0.27 0.13 0.20 0.20 0.27 0.20 -2.27
0.00
0.00 0.00
54 HOKKAIDO SHIMBUN morning
0.19 0.19 0.09 0.09 0.19 0.19 0.00
-1.52 0.66
0.00
55 HOKKAIDO SHIMBUN morning + evening
0.10 0.10 0.10 0.10 0.10 0.19 0.00
0.58 -1.84
0.00
56 TOO NIPPO morning + evening
0.23
0.11
0.23
0.00
-1.26 0.46
58 DAILY TOHOKU
0.16
0.16
0.16
0.00
0.82 -1.48
59 THE IWATE NIPPO morning + evening
0.38
0.19
0.38
0.00
-1.14
61 THE KAHOKU SHIMPO morning
0.43
0.29
0.43
0.00
-1.59 0.58
62 THE KAHOKU SHIMPO morning + evening
0.31
0.31
0.31
0.00
0.47 -1.86
63 AKITA SAKIGAKE SHIMPO morning + evening
0.35
0.26
0.35
0.00
-1.04
65 YAMAGATA SHIMBUN morning + evening
0.36
0.27
0.44
0.09
-1.16
67 FUKUSHIMA MINPO
0.42
0.28
0.42
0.00
-1.40 0.56
68 FUKUSHIMA MINYU
0.27
0.14
0.27
0.00
0.55 -1.51
69 THE IBARAKI SHIMBUN
0.22 0.22 0.00 0.00 0.22 0.22 0.00
-1.78
0.22
70 SHIMOTSUKE SHIMBUN
0.23 0.23 0.23 0.23 0.23 0.45 0.00
-1.82
0.45
71 THE JOMO SHINBUN
0.21 0.21 0.00 0.21 0.21 0.21 0.00
-1.86 0.41
74 THE TOKYO SHIMBUN morning
0.25 0.27 0.16 0.18 0.25 0.27 0.02
0.04 0.04 0.04 -1.51 0.20 0.04
75 THE TOKYO SHIMBUN morning + evening
0.24 0.24 0.12 0.16 0.20 0.24 0.00
0.36 -1.94 0.04
76 KANAGAWA SHIMBUN
0.19 0.19 0.19 0.19 0.19 0.19 0.00
0.37 0.19 -1.85
77 NIIGATA NIPPO morning
0.45
0.30
0.45
0.00
-1.64 0.60
78 NIIGATA NIPPO morning + evening
0.32
0.16
0.32
0.00
0.48 -1.90
79 KITANIPPON SHIMBUN morning
0.21
0.21
0.21 0.41 0.00
-1.65
82 THE HOKKOKU SHIMBUN morning
0.00
0.00
0.00 0.00 0.00
-1.62 0.54 0.54 0.54
81 THE HOKKOKU SHIMBUN morning + evening
0.00
0.00
0.00 0.00 0.00
0.29 -2.35 0.00 0.29
83 THE HOKURIKU CHUNICHI SHIMBUN morning
0.00
0.00
0.25 0.25 0.00
0.25 0.25 -1.77 0.25
84 THE HOKURIKU CHUNICHI SHIMBUN morning + evening 0.29
0.29
0.29 0.29 0.00
0.29 0.29 0.29 -2.29
85 FUKUI SHIMBUN
0.19
0.19
0.19
0.19
-1.51 0.57
0.19
86 THE NIKKAN KENMIN FUKUI
0.12
0.12
0.24
0.12
0.37 -1.10
0.12
87 YAMANASHI NICHINICHI SHIMBUN
0.21 0.21 0.21 0.21 0.42 0.42 0.00
-1.68
88 SHINANO MAINICHI SHIMBUN morning
0.33
0.17
0.33
0.00
-1.67 0.50
0.17
89 SHINANO MAINICHI SHIMBUN morning + evening
0.36
0.18
0.36
0.18
0.54 -1.80
0.18
90 GIFU SHIMBUN morning
0.23 0.23 0.23 0.23 0.23
0.23
-1.82 0.45
0.45 0.23
91 GIFU SHIMBUN morning + evening
0.17 0.17 0.00 0.17 0.17
0.00
0.35 -1.91
0.35 0.17
92 SHIZUOKA SHIMBUN morning + evening
0.27 0.27 0.14 0.14 0.27 0.27 0.14
-1.49 0.27 0.14
94 THE CHUNICHI SHIMBUN morning
0.24 0.24 0.12 0.12 0.28 0.04 0.12 0.00
0.00 0.04 0.00 0.00 0.00 0.04 0.08 0.04 -1.78 0.20 0.04 0.00
95 THE CHUNICHI SHIMBUN morning + evening
0.26 0.35 0.17 0.17 0.26 0.09 0.17
0.09
0.09 0.09 0.09 0.35 -2.18 0.00 0.00
97 KYOTO SHIMBUN morning
0.23 0.23 0.11 0.11 0.23 0.23 0.11 0.11
0.11
-1.82 0.23
98 KYOTO SHIMBUN morning + evening
0.19 0.19 0.00 0.00 0.19 0.19 0.00 0.00
0.00
0.19 -2.31
99 KOBE SHIMBUN morning
0.14 0.29 0.14 0.14 0.29 0.29 0.14 0.14
100 KOBE SHIMBUN morning + evening
0.24 0.00 0.00 0.00 0.00 0.00 0.24 0.24
102 NIHONKAI SHIMBUN
0.25
0.08
0.25
0.17
103 SANIN CHUO SHIMPO
0.28
0.09
0.28
0.09
104 THE SANYO SHIMBUN morning
0.44
0.22
0.44
0.22
105 THE SANYO SHIMBUN morning + evening
0.24
0.00
0.24
0.00
106 THE CHUGOKU SHIMBUN morning
0.24 0.08 0.16 0.00 0.24 0.08 0.16
107 THE CHUGOKU SHIMBUN morning + evening
0.17 0.00 0.17 0.00 0.17 0.00 0.17
108 TOKUSHIMA SHIMBUN morning
0.33
0.17
0.33
0.17
109 TOKUSHIMA SHIMBUN morning + evening
0.17
0.17
0.33
0.17
110 SHIKOKU SHIMBUN
0.32
0.21
0.32
0.21
111 EHIME SHIMBUN
0.30
0.20
0.30
0.20
112 KOCHI SHIMBUN morning
0.32
0.16
0.32
0.16
113 KOCHI SHIMBUN morning + evening
0.15
0.15
0.15
0.15
114 THE NISHINIPPON SHIMBUN morning
0.16 0.12 0.12 0.08 0.16 0.12 0.04
115 THE NISHINIPPON SHIMBUN morning + evening
0.13 0.13 0.00 0.00 0.13 0.13 0.00
116 SAGA SHIMBUN
0.12 0.12 0.00 0.00 0.12 0.00 0.00
117 NAGASAKI SHIMBUN
0.17
0.08
0.17
0.00
118 KUMAMOTO NICHINICHI SHIMBUN morning
0.16
0.16
0.16
0.00
119 KUMAMOTO NICHINICHI SHIMBUN morning + evening
0.11
0.00
0.11
0.00
120 OITA GODO SHIMBUN morning + evening
0.10 0.10 0.10 0.10 0.10 0.10 0.00
122 MIYAZAKI NICHINICHI SHIMBUN (THE MIYANICHI)
0.14
0.14
0.21
0.00
123 MINAMINIPPON SHIMBUN morning
0.13
0.13
0.13
0.00
124 MINAMINIPPON SHIMBUN morning + evening
0.11
0.11
0.11
0.00
126 THE OKINAWA TIMES morning + evening
0.00 0.00 0.00 0.00 0.00 0.00 0.00
128 THE RYUKYU SHIMPO morning + evening
0.00 0.00 0.00 0.00 0.00 0.00 0.00
NONE
fraction of switchers that choose NONE when price rises

27

KOBE SHIMBUN morning + evening

NIHONKAI SHIMBUNSANIN CHUO SHIMPOTHE SANYO SHIMBUN morning

THE SANYO SHIMBUN morning + evening

THE CHUGOKU SHIMBUN morning

THE CHUGOKU SHIMBUN morning + evening

TOKUSHIMA SHIMBUN morning

TOKUSHIMA SHIMBUN morning + evening

SHIKOKU SHIMBUNEHIME SHIMBUNKOCHI SHIMBUN morning

KOCHI SHIMBUN morning + evening

THE NISHINIPPON SHIMBUN morning

THE NISHINIPPON SHIMBUN morning + evening

SAGA SHIMBUNNAGASAKI SHIMBUNKUMAMOTO NICHINICHI SHIMBUN morning

KUMAMOTO NICHINICHI SHIMBUN morning + e

OITA GODO SHIMBUN morning + evening

MIYAZAKI NICHINICHI SHIMBUN (THE MIYANMINAMINIPPON SHIMBUN morning

MINAMINIPPON SHIMBUN morning + evening

THE OKINAWA TIMES morning + evening

THE RYUKYU SHIMPO morning + evening

Id.
No.

KOBE SHIMBUN morning

Table A1. Cont'd. 2007 Elasticity of Demand with Respect to Price (arc elasticities based on five percent increase in price of row new

0.25

0.10

0.25

0.23

0.29

0.22

0.15

0.18

0.00

0.09

0.08

0.08

0.00

0.00

0.13

0.06

0.00

0.17

0.10

0.15

0.23

0.60

0.09

0.15

0.17

0.17

Newspaper
1 THE ASAHI SHIMBUN morning
0.01 0.01 0.01 0.02 0.01 0.01 0.02 0.01 0.01 0.01 0.02 0.02 0.01 0.01 0.02 0.01 0.01 0.01 0.00 0.01 0.01 0.01 0.01 0.01 0.00 0.00
2 THE ASAHI SHIMBUN morning + evening
0.01 0.01
0.00 0.00
0.02 0.00 0.00
0.01
0.00 0.00
13 MAINICHI SHIMBUN morning
0.01 0.01 0.02 0.02 0.01 0.01 0.02 0.01 0.01 0.01 0.02 0.02 0.01 0.01 0.03 0.01 0.01 0.02 0.01 0.01 0.01 0.02 0.01 0.01 0.00 0.00
14 MAINICHI SHIMBUN morning + evening
0.02 0.02
0.00 0.00
0.02 0.02 0.00
0.02
0.00 0.00
25 YOMIURI SHIMBUN morning
0.01 0.01 0.01 0.02 0.01 0.01 0.02 0.01 0.01 0.01 0.02 0.02 0.01 0.01 0.02 0.01 0.01 0.01 0.00 0.01 0.01 0.01 0.01 0.01 0.00 0.00
26 YOMIURI SHIMBUN morning + evening
0.03 0.01
0.01 0.00
0.03 0.01 0.00
0.03
0.00 0.00
49 SANKEI SHIMBUN morning
0.02 0.02 0.02 0.04 0.02 0.02 0.04 0.02 0.02 0.02 0.04 0.04 0.02 0.02 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
50 SANKEI SHIMBUN morning + evening
0.00 0.00
54 HOKKAIDO SHIMBUN morning
55 HOKKAIDO SHIMBUN morning + evening
56 TOO NIPPO morning + evening
58 DAILY TOHOKU
59 THE IWATE NIPPO morning + evening
61 THE KAHOKU SHIMPO morning
62 THE KAHOKU SHIMPO morning + evening
63 AKITA SAKIGAKE SHIMPO morning + evening
65 YAMAGATA SHIMBUN morning + evening
67 FUKUSHIMA MINPO
68 FUKUSHIMA MINYU
69 THE IBARAKI SHIMBUN
70 SHIMOTSUKE SHIMBUN
71 THE JOMO SHINBUN
74 THE TOKYO SHIMBUN morning
75 THE TOKYO SHIMBUN morning + evening
76 KANAGAWA SHIMBUN
77 NIIGATA NIPPO morning
78 NIIGATA NIPPO morning + evening
79 KITANIPPON SHIMBUN morning
82 THE HOKKOKU SHIMBUN morning
81 THE HOKKOKU SHIMBUN morning + evening
83 THE HOKURIKU CHUNICHI SHIMBUN morning
84 THE HOKURIKU CHUNICHI SHIMBUN morning + evening
85 FUKUI SHIMBUN
86 THE NIKKAN KENMIN FUKUI87 YAMANASHI NICHINICHI SHIMBUN
88 SHINANO MAINICHI SHIMBUN morning
89 SHINANO MAINICHI SHIMBUN morning + evening
90 GIFU SHIMBUN morning
91 GIFU SHIMBUN morning + evening
92 SHIZUOKA SHIMBUN morning + evening
94 THE CHUNICHI SHIMBUN morning
95 THE CHUNICHI SHIMBUN morning + evening
97 KYOTO SHIMBUN morning
98 KYOTO SHIMBUN morning + evening
99 KOBE SHIMBUN morning-1.73 0.29
100 KOBE SHIMBUN morning + evening
0.24 -2.44
102 NIHONKAI SHIMBUN
-0.68
0.00
103 SANIN CHUO SHIMPO-1.20
104 THE SANYO SHIMBUN morning-1.56 0.44
105 THE SANYO SHIMBUN morning + evening
0.24 -2.14
106 THE CHUGOKU SHIMBUN morning
0.00-1.57 0.31
107 THE CHUGOKU SHIMBUN morning + evening
0.52 -1.91
108 TOKUSHIMA SHIMBUN morning-1.49 0.66
109 TOKUSHIMA SHIMBUN morning + evening
0.50 -1.83
110 SHIKOKU SHIMBUN-1.27
111 EHIME SHIMBUN-1.21
112 KOCHI SHIMBUN morning-1.43 0.79
113 KOCHI SHIMBUN morning + evening
0.61 -1.67
114 THE NISHINIPPON SHIMBUN morning-1.55 0.23 0.19 0.12 0.08 0.08 0.08 0.00
115 THE NISHINIPPON SHIMBUN morning + evening
0.64 -2.04
116 SAGA SHIMBUN
0.59
-1.29
117 NAGASAKI SHIMBUN
0.17
-1.00
118 KUMAMOTO NICHINICHI SHIMBUN morning
0.31-1.56 0.94
119 KUMAMOTO NICHINICHI SHIMBUN morning + evening
0.22
0.56 -1.45
120 OITA GODO SHIMBUN morning + evening
0.10
-1.32
122 MIYAZAKI NICHINICHI SHIMBUN (THE MIYANICHI)
0.00
-0.70
-1.38 1.00
123 MINAMINIPPON SHIMBUN morning
124 MINAMINIPPON SHIMBUN morning + evening
0.74 -1.38
126 THE OKINAWA TIMES morning + evening-1.22 0.91
128 THE RYUKYU SHIMPO morning + evening
0.92 -1.22
NONE
fraction of switchers that choose NONE when price rises

28

-0.22
0.00
0.00
-0.05
-0.08
0.00

0.00

0.00
0.00
0.00
-0.04
0.00
-0.11
-0.19
0.00
0.00

0.00
0.00

-0.04
0.00
-0.12

-0.10

0.00
0.00

-0.22
0.00
0.00
-0.04
-0.04
0.00

0.00

0.00
0.00
0.00
-0.04
0.00
-0.11
0.00
0.00
0.00

0.00
0.00

0.00
-0.13
0.00

0.00

0.00
0.00

-0.22
0.00
-0.21
-0.05
-0.08
0.00

-0.21
-0.27
-0.29
0.00
-0.28

0.00

-0.04
0.00
-0.11
-0.19
0.00
0.00

0.00
0.00

0.00
-0.13
0.00

-0.10

0.00
0.00

0.00
0.00
0.00

0.00
0.00
0.00

KYOTO SHIMBUN morning + evening

0.00
0.00
0.00

KYOTO SHIMBUN morning

0.00
0.00
0.00

0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
0.00 -0.01 -0.01 -0.01 -0.01
0.00 0.01 0.00
0.00 0.00 0.00 0.00 0.00

THE CHUNICHI SHIMBUN morning + evening

0.00

THE CHUNICHI SHIMBUN morning

0.00

0.00

SHIZUOKA SHIMBUN morning + evening

0.00

0.00

GIFU SHIMBUN morning + evening

0.00

0.00

GIFU SHIMBUN morning

0.00

0.00

SHINANO MAINICHI SHIMBUN morning + evening

0.00

0.00

SHINANO MAINICHI SHIMBUN morning

0.00

YAMANASHI NICHINICHI SHIMBUNTHE NIKKAN KENMIN FUKUI-0.01 0.00 0.00 0.00 0.00 -0.01 -0.01 0.00 -0.01 -0.01 0.00 -0.01 0.00 0.00 0.00 -0.02 -0.01 0.00 0.00 0.00 0.00
0.00 -0.01 0.00
-0.01 0.00 -0.01 -0.04 -0.02 0.01
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.02 -0.01 0.00 0.00 0.00 0.00
-0.02 0.00 0.00
0.00 0.00 0.00 -0.04 -0.02 0.00
-0.01 -0.01 -0.01 -0.01 0.00 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01 0.00 -0.01 0.00 -0.02 -0.01 0.00 -0.01 -0.01 -0.01-0.01 0.00 0.00
0.00 0.00 0.00 -0.03 -0.01 0.00
0.00
-0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.40
0.28 -0.09
0.00-0.19 0.29
0.00
0.34 -0.11-0.16 0.33
0.29
0.43 -0.14-0.16 0.31
0.26
0.27
0.42 0.00-0.14 0.27
0.22
-0.22
0.45
0.00
0.41 -0.21-0.02 -0.02 0.00 0.38 -0.04 -0.02-0.12 0.40 -0.04-0.19 0.00 0.37
0.45 -0.15-0.16 0.32
0.21

FUKUI SHIMBUNKITANIPPON SHIMBUN morning

NIIGATA NIPPO morning + evening

NIIGATA NIPPO morning

KANAGAWA SHIMBUNTHE TOKYO SHIMBUN morning + evening

THE TOKYO SHIMBUN morning

THE JOMO SHINBUNSHIMOTSUKE SHIMBUN

THE IBARAKI SHIMBUNFUKUSHIMA MINYUFUKUSHIMA MINPOYAMAGATA SHIMBUN morning + evening

AKITA SAKIGAKE SHIMPO morning + evening

THE KAHOKU SHIMPO morning + evening

THE KAHOKU SHIMPO morning

THE IWATE NIPPO morning + evening

DAILY TOHOKUTOO NIPPO morning + evening

HOKKAIDO SHIMBUN morning + evening

HOKKAIDO SHIMBUN morning

SANKEI SHIMBUN morning + evening

SANKEI SHIMBUN morning
-0.02
-0.01
-0.02
-0.02
-0.02
-0.01
0.44
-0.07
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.02
-0.04
0.00
0.00
0.00
-0.21
-0.27
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.04
0.00
-0.11
0.00
0.00
-0.24
-0.08
-0.09
0.00
-0.24
-0.08
0.00
0.00
0.00
-0.11
0.00
0.00
0.00
0.00
0.13
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

THE HOKURIKU CHUNICHI SHIMBUN morning +

-0.02
-0.05
-0.03
-0.06
-0.03
0.43
-0.02
-0.07
0.00
0.00

THE HOKURIKU CHUNICHI SHIMBUN morning

-0.06
-0.06
-0.06
-0.06
0.41
-0.05
-0.05
-0.07
0.00
0.00
0.00
0.00
-0.10
0.00
0.00
-0.09
-0.09
0.00
-0.14
-0.22
0.00
0.00
-0.05
-0.08
0.00
0.00
0.00
-0.21
-0.27
-0.29
0.00
0.00
0.00
-0.12
0.00
-0.17
0.00
0.00
0.00
0.00
-0.08
0.00
-0.11
-0.19
0.00
-0.24
-0.08
-0.09
0.00
-0.24
-0.08
0.00
0.00
0.00
-0.11
-0.10
0.00
0.00
-0.04
0.00
-0.12
-0.08
0.00
0.00
-0.10
0.00
0.00
0.00
0.00
0.00

YOMIURI SHIMBUN morning + evening

YOMIURI SHIMBUN morning

MAINICHI SHIMBUN morning + evening
-0.02
-0.04
-0.02
0.46
-0.02
-0.03
-0.02
-0.07
0.00
0.00

THE HOKKOKU SHIMBUN morning + evening

-0.04
-0.04
0.43
-0.04
-0.04
-0.04
-0.05
-0.07
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.09
0.00
-0.14
-0.14
-0.22
0.00
0.00
-0.04
-0.04
0.00
0.00
0.00
-0.21
-0.27
-0.29
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.04
0.00
-0.11
0.00
0.00
0.00
-0.08
-0.09
0.00
-0.24
-0.08
0.00
0.00
0.00
-0.11
0.00
0.00
0.00
0.00
-0.13
-0.12
-0.08
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

THE HOKKOKU SHIMBUN morning

-0.03
0.42
-0.03
-0.06
-0.03
-0.06
-0.02
-0.07
0.00
0.00

MAINICHI SHIMBUN morning

Newspaper
1 THE ASAHI SHIMBUN morning
0.41
2 THE ASAHI SHIMBUN morning + evening-0.06
13 MAINICHI SHIMBUN morning-0.07
14 MAINICHI SHIMBUN morning + evening-0.06
25 YOMIURI SHIMBUN morning-0.07
26 YOMIURI SHIMBUN morning + evening-0.05
49 SANKEI SHIMBUN morning-0.05
50 SANKEI SHIMBUN morning + evening-0.07
54 HOKKAIDO SHIMBUN morning
0.00
55 HOKKAIDO SHIMBUN morning + evening
0.00
56 TOO NIPPO morning + evening
0.00
58 DAILY TOHOKU
0.00
59 THE IWATE NIPPO morning + evening-0.10
61 THE KAHOKU SHIMPO morning
0.00
62 THE KAHOKU SHIMPO morning + evening
0.00
63 AKITA SAKIGAKE SHIMPO morning + evening-0.09
65 YAMAGATA SHIMBUN morning + evening-0.09
67 FUKUSHIMA MINPO-0.14
68 FUKUSHIMA MINYU-0.14
69 THE IBARAKI SHIMBUN-0.22
70 SHIMOTSUKE SHIMBUN
0.00
71 THE JOMO SHINBUN-0.21
74 THE TOKYO SHIMBUN morning
-0.05
THE
TOKYO
SHIMBUN
morning+evening
75-0.08
76 KANAGAWA SHIMBUN
0.00
77 NIIGATA NIPPO morning
0.00
78 NIIGATA NIPPO morning + evening-0.16
79 KITANIPPON SHIMBUN morning-0.21
82 THE HOKKOKU SHIMBUN morning
0.00
81 THE HOKKOKU SHIMBUN morning + evening-0.29
83 THE HOKURIKU CHUNICHI SHIMBUN morning
0.00
84 THE HOKURIKU CHUNICHI SHIMBUN morning + even-0.28
85 FUKUI SHIMBUN
0.00
86 THE NIKKAN KENMIN FUKUI-0.12
87 YAMANASHI NICHINICHI SHIMBUN
0.00
88 SHINANO MAINICHI SHIMBUN morning-0.17
89 SHINANO MAINICHI SHIMBUN morning + evening
0.00
90 GIFU SHIMBUN morning
0.00
91 GIFU SHIMBUN morning + evening
0.00
92 SHIZUOKA SHIMBUN morning + evening
0.00
94 THE CHUNICHI SHIMBUN morning-0.08
95 THE CHUNICHI SHIMBUN morning + evening
0.00
97 KYOTO SHIMBUN morning-0.11
98 KYOTO SHIMBUN morning + evening-0.19
99 KOBE SHIMBUN morning
0.00
100 KOBE SHIMBUN morning + evening
0.00
102 NIHONKAI SHIMBUN-0.08
103 SANIN CHUO SHIMPO-0.09
104 THE SANYO SHIMBUN morning
0.00
105 THE SANYO SHIMBUN morning + evening-0.24
106 THE CHUGOKU SHIMBUN morning-0.08
107 THE CHUGOKU SHIMBUN morning + evening-0.17
108 TOKUSHIMA SHIMBUN morning
0.00
109 TOKUSHIMA SHIMBUN morning + evening
0.00
110 SHIKOKU SHIMBUN-0.11
111 EHIME SHIMBUN
0.00
112 KOCHI SHIMBUN morning
0.00
113 KOCHI SHIMBUN morning + evening
0.00
114 THE NISHINIPPON SHIMBUN morning-0.04
115 THE NISHINIPPON SHIMBUN morning + evening-0.13
116 SAGA SHIMBUN-0.12
117 NAGASAKI SHIMBUN-0.08
118 KUMAMOTO NICHINICHI SHIMBUN morning
0.00
KUMAMOTONICHINICHISHIMBUN
morning+evenin119
0.00
120 OITA GODO SHIMBUN morning + evening-0.10
122 MIYAZAKI NICHINICHI SHIMBUN (THE MIYANICHI 0.00
123 MINAMINIPPON SHIMBUN morning
0.00
124 MINAMINIPPON SHIMBUN morning + evening
0.00
126 THE OKINAWA TIMES morning + evening
0.00
128 THE RYUKYU SHIMPO morning + evening
0.00

THE ASAHI SHIMBUN morning + evening

Id.
No.

THE ASAHI SHIMBUN morning

Table A2. 2007 Elasticity of Demand with Respect to Pages of Content per Month (Arc Elasticities Based on Five Percent Increase in Price of Row Newspaper)

0.00 0.00 0.00 -0.01 -0.01 0.00 0.00
0.00 -0.01 -0.01 -0.02 -0.01 -0.01 -0.01
0.00 0.00 0.00 -0.01 0.00 0.00 0.00
0.00 0.00 0.00 -0.02 0.00 0.00 0.00
0.00 0.00 -0.01 -0.01 -0.01 -0.01 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 -0.02 0.00 0.00 0.00
0.00
-0.07 -0.07

0.55 -0.27 -0.27 -0.27-0.29 0.59 0.00 -0.29-0.25 -0.25 0.25 -0.25-0.28 0.00 0.00 0.56
0.38 -0.19-0.12 0.24

0.00
-0.12
0.42
0.33 -0.17
0.00 0.36

0.00
0.00
0.00 0.00
0.00 0.00
0.41 0.00 0.00
0.00 -0.04 -0.04 -0.04 0.40 -0.04 0.00 0.00
0.00 0.00 0.00 -0.17 0.44 -0.09 0.00
-0.11
0.34 -0.11
0.00-0.19 0.38
0.45
-0.17

0.00

0.00 -0.04

-0.11
0.00
0.00
0.00

29

0.00
0.00

0.00

0.00
0.35

0.00

0.00

0.00

0.00
0.00

THE RYUKYU SHIMPO morning + evening

MINAMINIPPON SHIMBUN morning + evening

0.00

0.00 0.00-0.01
0.00 0.00
0.00
0.00 -0.01 -0.01
0.00
0.00 0.00 0.00

THE OKINAWA TIMES morning + evening

MINAMINIPPON SHIMBUN morning

MIYAZAKI NICHINICHI SHIMBUN (THE MIYAN

0.00

0.00 -0.01 0.00 0.00 0.00
-0.01 -0.01 -0.01
0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00 -0.01 -0.01 0.00 -0.01 -0.01
0.00 0.00 -0.01
0.00 0.00 0.00 0.00 0.00 0.00

OITA GODO SHIMBUN morning + evening

KUMAMOTO NICHINICHI SHIMBUN morning + e

0.00

0.00

NAGASAKI SHIMBUN

0.00

0.00

SAGA SHIMBUN

0.00

0.00

THE NISHINIPPON SHIMBUN morning + evening

0.00

0.00

THE NISHINIPPON SHIMBUN morning

0.00

KOCHI SHIMBUN morning + evening

KUMAMOTO NICHINICHI SHIMBUN morning

0.00 -0.01 0.00 0.00 0.00 -0.01 0.00 0.00 0.00 0.00 -0.01
0.00
0.01 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00
0.00 0.00
0.00 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01 -0.01
0.00
0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00

KOCHI SHIMBUN morning

EHIME SHIMBUNSHIKOKU SHIMBUNTOKUSHIMA SHIMBUN morning + evening

TOKUSHIMA SHIMBUN morning

THE CHUGOKU SHIMBUN morning + evening

THE CHUGOKU SHIMBUN morning

THE SANYO SHIMBUN morning + evening

THE SANYO SHIMBUN morning

SANIN CHUO SHIMPONIHONKAI SHIMBUN

Newspaper
1 THE ASAHI SHIMBUN morning
0.00
2 THE ASAHI SHIMBUN morning + evening
0.00
13 MAINICHI SHIMBUN morning
0.00
MAINICHISHIMBUN
morning+evening
14
0.00
25 YOMIURI SHIMBUN morning
0.00
26 YOMIURI SHIMBUN morning + evening
0.00
49 SANKEI SHIMBUN morning
0.00
50 SANKEI SHIMBUN morning + evening-0.07
54 HOKKAIDO SHIMBUN morning
55 HOKKAIDO SHIMBUN morning + evening
56 TOO NIPPO morning + evening
58 DAILY TOHOKU
59 THE IWATE NIPPO morning + evening
61 THE KAHOKU SHIMPO morning
62 THE KAHOKU SHIMPO morning + evening
63 AKITA SAKIGAKE SHIMPO morning + evening
65 YAMAGATA SHIMBUN morning + evening
67 FUKUSHIMA MINPO
68 FUKUSHIMA MINYU
69 THE IBARAKI SHIMBUN
70 SHIMOTSUKE SHIMBUN
71 THE JOMO SHINBUN
74 THE TOKYO SHIMBUN morning
75 THE TOKYO SHIMBUN morning + evening
76 KANAGAWA SHIMBUN
77 NIIGATA NIPPO morning
78 NIIGATA NIPPO morning + evening
79 KITANIPPON SHIMBUN morning
82 THE HOKKOKU SHIMBUN morning
81 THE HOKKOKU SHIMBUN morning + evening
83 THE HOKURIKU CHUNICHI SHIMBUN morning
84 THE HOKURIKU CHUNICHI SHIMBUN morning + evening
85 FUKUI SHIMBUN
86 THE NIKKAN KENMIN FUKUI87 YAMANASHI NICHINICHI SHIMBUN
88 SHINANO MAINICHI SHIMBUN morning
89 SHINANO MAINICHI SHIMBUN morning + evening
90 GIFU SHIMBUN morning
91 GIFU SHIMBUN morning + evening
92 SHIZUOKA SHIMBUN morning + evening
94 THE CHUNICHI SHIMBUN morning
95 THE CHUNICHI SHIMBUN morning + evening
97 KYOTO SHIMBUN morning
98 KYOTO SHIMBUN morning + evening
99 KOBE SHIMBUN morning
0.43
100 KOBE SHIMBUN morning + evening-0.24
102 NIHONKAI SHIMBUN
103 SANIN CHUO SHIMPO
104 THE SANYO SHIMBUN morning
105 THE SANYO SHIMBUN morning + evening
106 THE CHUGOKU SHIMBUN morning
107 THE CHUGOKU SHIMBUN morning + evening
108 TOKUSHIMA SHIMBUN morning
109 TOKUSHIMA SHIMBUN morning + evening
110 SHIKOKU SHIMBUN
111 EHIME SHIMBUN
112 KOCHI SHIMBUN morning
113 KOCHI SHIMBUN morning + evening
114 THE NISHINIPPON SHIMBUN morning
115 THE NISHINIPPON SHIMBUN morning + evening
116 SAGA SHIMBUN
117 NAGASAKI SHIMBUN
118 KUMAMOTO NICHINICHI SHIMBUN morning
119 KUMAMOTO NICHINICHI SHIMBUN morning + evening
120 OITA GODO SHIMBUN morning + evening
122 MIYAZAKI NICHINICHI SHIMBUN (THE MIYANICHI)
123 MINAMINIPPON SHIMBUN morning
124 MINAMINIPPON SHIMBUN morning + evening
126 THE OKINAWA TIMES morning + evening
128 THE RYUKYU SHIMPO morning + evening

KOBE SHIMBUN morning + evening

Id.
No.

KOBE SHIMBUN morning

Table A2 Cont'd. 2007 Elasticity of Demand with Respect to Pages of Content per Month (Arc Elasticities Based on Five Percent Increase in Price of Row N

0.00
-0.01
0.00
0.00
0.00 0.00
0.00
0.00 0.00

0.00
0.01
0.00
0.00
0.00
0.00
0.00

0.00
0.49
0.17

0.00
0.28
0.44
0.00
0.00

0.00
0.24
0.31 -0.08-0.17 0.35
0.33
-0.17

0.00
0.33
0.21
0.30
0.32
-0.15

0.00
0.30
0.35 -0.04 -0.04-0.25 0.38
-0.24
0.24
0.00
0.00
-0.11
-0.10
0.00

0.00

0.00

0.00

0.17
0.31 -0.16-0.11 0.22
0.20
0.14
0.38 -0.13-0.11 0.32
0.20 -0.20-0.20 0.2030

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Van Cayseele, Patrick and Stijn Vanormelingen. (2009). “Prices and Network Effects in
Two-Sided Markets: the Belgian Newspaper Industry”, unpublished manuscript.
Video Research Ltd. (2007), Japan Readers and Area Data (JREAD) Survey conducted in
March 2007.

33

10.2

17.1

9.2

10.1

7.7

4.5

6.1

6.8

3.4

1.8

3.0

1.7

9.9

16.7

9.3

8.3

11.9

5.2

1.1

0.9

0.8

1.2

0.9

0.6

Hokkaido

Aomori

18.7
1.9
12.3
0.6
40.9
1.5
6.9

Iwate

11.3
1.0
6.7
0.4
27.7
0.7
6.1

Miyagi4.0 22.4 13.8
0.3
1.0
0.3
0.2 1.4

0.8

12.7
0.7
7.6
0.4
33.2
0.5
4.3

Akita

5.1

10.5 6.4 12.7 14.4
15.0 13.3 9.6
7.8
3.3
3.5
6.6
8.3
1.8
1.9
2.3
3.2
12.1 6.4 22.5 28.4
16.3 17.3 13.3 10.3
3.2
6.0
5.2
3.7

Yamagata

3.3

Fukushima

8.5

0.5

Chiba

2.8

0.6

Tokyo

3.0

1.4

Kanagawa

4.7

Ibaraki

0.9

8.6

9.5
0.7
3.5
0.3
12.5
0.3
1.9

Tochigi

0.1

2.3

Gumma

7.7

Yamanashi

NaganoShizuoka

Gifu
5.9
2.4
2.5
0.7
2.9

Saitama

0.1

7.4
0.2
2.7
1.7
4.1
2.5
1.7

Niigata

5.7
3.7
2.4
1.1
3.3

Toyama17.4 14.1
6.2 3.6
12.0 7.7
2.1 1.5
23.7 8.7
5.1
4.3 1.5
0.8

Aichi

Mie

Shiga

Kyoto

Osaka

3.4 7.3
17.6 11.1
2.4 5.0
13.1 4.3
4.6 8.3
20.1 9.7
7.1 1.8
13.1 1.1

Ishikawa

8.4 7.9
20.1 14.5
13.3 4.1
14.1 6.5
8.9 9.8
15.4 14.2
13.4 3.4
8.9 2.8

Fukui

16.3
7.8
13.9
4.7
12.6 21.9
7.8
1.3 12.3
2.4
4.6

Hyogo

0.6

2.8

8.0

Nara

3.2

1.5

Wakayama

12.9 15.1

0.4

25.3 11.1 10.9 9.9
1.4
22.5 2.9 4.0 5.9
1.1
28.2 12.4 11.3 14.8
1.3
0.0 1.6 1.8 1.1

Tottori

3.1

Shimane

1.4

Okayama

6.2

Hiroshima

4.9

5.4

Yamaguchi

11.3 15.0

1.5

Ehime

3.2

3.9
2.0
2.1
0.6
8.9
2.4
0.0
21.8
24.3

46.6
43.1
12.1
62.4
53.5
41.4
27.3
11.3

2.2
0.7

0.9

3.1

1,079,882

2.4
0.7

41.7
2.9

730,5571.2
3.0

2,454,027

1.1
1.5
5.7

6,060,432

43.8

53.2
6.5
65.7
19.6
50.6
19.0
2.3
78.2
15.1
63.3
54.3
6.5
20.2
4.3

12.2
27.5

10.8 42.6
6.0
12.6
3.8

44.9
18.2

51.3
7.6 50.1
2.5
6.7

5.9

3.3

24.7
11.2
75.7
62.4
49.9
9.5
9.3 48.3
5.7

2.6

63.1
17.3
52.0
51.6
24.2
41.1
0.9

3.7

3.5 13.8

20.6 22.7
8.2
46.7

31.5
38.2
12.3
46.6
44.3

98.5 97.2

96.0 95.0

85.1 76.6

70.1 56.7

65.9

497,023

883,414415,863394,212736,288745,233

77.6 103.9

2,599,764

60.3 74.7

2,781,143

3,774,373

86.6 71.0

562,91999.7 92.5

831,390108.6

379,768

266,94886.2 91.9

431,925

328,309798,841

724,887
95.6

701,695

81.6

487,389

81.2 88.2 98.7 85.5 79.2

34

1,085,362

1,397,457

96.5 102.2 87.1 102.5 99.0

3,779,054

540,5422,267,661

420,679

222,832

272,241

758,762

1,198,083

633,395

314,289

91.0 90.6 89.2 81.9 87.4

2,774,999

76.5 93.0 82.6 73.4 82.6

401,497

618,521346,22870.9

2,104,652

712,952

81.3

302,591

495,12068.9

601,788489,832

46.2
3.3

58.6

41,353,459

7.2
0.3
7.3

26.4
18.3

All Japan number of households 53,101,635
Penetration Rate
77.9% 77.6

Total

8.4

Tokushima

2.8

Kagawa

11.0
5.6
11.7
3.9
7.9 11.9 10.8 14.8
4.6
0.1
0.1 0.1 0.1
6.3 10.9

Kochi

0.0

Fukuoka

7.3

0.0

Saga

4.3

9.9
1.3
6.8
0.5
11.8
0.6
0.1

Nagasaki

6.2

Kumamoto

10.2

1.4

Oita

3.5

775,541

4,478,447 8.4% 0.3
3,588,260 6.8% 0.3
2,510,628 4.7% 0.1
1,463,199 2.8% 0.1
6,163,453 11.6% 0.1
3,868,988 7.3% 0.1
1,567,455 3.0% 0.0
633,154 1.2%
564,517 1.1%
639,634 1.2%
255,976 0.5%
107,369 0.2%
231,437 0.4%
391,485 0.7%
109,871 0.2%
260,884 0.5%
211,003 0.4%
303,626 0.6%
201,876 0.4%
123,136 0.2%
321,807 0.6%
310,175 0.6%
304,619 0.6%
280,889 0.5%
218,041 0.4%
439,570 0.8%
55,784 0.1%
250,201 0.5%
258,466 0.5%
84,808 0.2%
93,152 0.2%
10,238 0.0%
209,144 0.4%
40,165 0.1%
208,133 0.4%
432,739 0.8%
52,492 0.1%
146,283 0.3%
31,070 0.1%
717,229 1.4%
2,124,288 4.0%
650,297 1.2%
192,119 0.4%
317,881 0.6%
307,099 0.6%
254,782 0.5%
175,497 0.3%
180,878 0.3%
394,612 0.7%
72,015 0.1%
644,166 1.2%
73,628 0.1%
200,102 0.4%
54,622 0.1%
208,307 0.4%
318,391 0.6%
84,657 0.2%
143,219 0.3%
679,137 1.3%
175,518 0.3%
141,023 0.3%
190,034 0.4%
274,491 0.5%
90,269 0.2%
234,159 0.4%
232,578 0.4%
362,219 0.7%
26,034 0.0%
206,569 0.4% 38.8
205,465 0.4% 37.9

Miyazaki

penetration

532,688

Newspaper
1 THE ASAHI SHIMBUN morning
2 THE ASAHI SHIMBUN morning + evening
13 MAINICHI SHIMBUN morning
14 MAINICHI SHIMBUN morning + evening
25 YOMIURI SHIMBUN morning
26 YOMIURI SHIMBUN morning + evening
49 SANKEI SHIMBUN morning
50 SANKEI SHIMBUN morning + evening
54 HOKKAIDO SHIMBUN morning
55 HOKKAIDO SHIMBUN morning + evening
56 TOO NIPPO morning + evening
58 DAILY TOHOKU
59 THE IWATE NIPPO morning + evening
61 THE KAHOKU SHIMPO morning
62 THE KAHOKU SHIMPO morning + evening
63 AKITA SAKIGAKE SHIMPO morning + evening
65 YAMAGATA SHIMBUN morning + evening
67 FUKUSHIMA MINPO
68 FUKUSHIMA MINYU
69 THE IBARAKI SHIMBUN
70 SHIMOTSUKE SHIMBUN
71 THE JOMO SHINBUN
74 THE TOKYO SHIMBUN morning
75 THE TOKYO SHIMBUN morning + evening
76 KANAGAWA SHIMBUN
77 NIIGATA NIPPO morning
78 NIIGATA NIPPO morning + evening
79 KITANIPPON SHIMBUN morning
81 THE HOKKOKU SHIMBUN morning + evening
82 THE HOKKOKU SHIMBUN morning
83 THE HOKURIKU CHUNICHI SHIMBUN morning
84 THE HOKURIKU CHUNICHI SHIMBUN morning + evening
85 FUKUI SHIMBUN
86 THE NIKKAN KENMIN FUKUI87 YAMANASHI NICHINICHI SHIMBUN
88 SHINANO MAINICHI SHIMBUN morning
89 SHINANO MAINICHI SHIMBUN morning + evening
90 GIFU SHIMBUN morning
91 GIFU SHIMBUN morning + evening
92 SHIZUOKA SHIMBUN morning + evening
94 THE CHUNICHI SHIMBUN morning
95 THE CHUNICHI SHIMBUN morning + evening
97 KYOTO SHIMBUN morning
98 KYOTO SHIMBUN morning + evening
99 KOBE SHIMBUN morning
100 KOBE SHIMBUN morning + evening
102 NIHONKAI SHIMBUN
103 SANIN CHUO SHIMPO
104 THE SANYO SHIMBUN morning
105 THE SANYO SHIMBUN morning + evening
106 THE CHUGOKU SHIMBUN morning
107 THE CHUGOKU SHIMBUN morning + evening
108 TOKUSHIMA SHIMBUN morning
109 TOKUSHIMA SHIMBUN morning + evening
110 SHIKOKU SHIMBUN
111 EHIME SHIMBUN
112 KOCHI SHIMBUN morning
113 KOCHI SHIMBUN morning + evening
114 THE NISHINIPPON SHIMBUN morning
115 THE NISHINIPPON SHIMBUN morning + evening
116 SAGA SHIMBUN
117 NAGASAKI SHIMBUN
118 KUMAMOTO NICHINICHI SHIMBUN morning
119 KUMAMOTO NICHINICHI SHIMBUN morning + evening
120 OITA GODO SHIMBUN morning + evening
122 MIYAZAKI NICHINICHI SHIMBUN (THE MIYANICHI)
123 MINAMINIPPON SHIMBUN morning
124 MINAMINIPPON SHIMBUN morning + evening
126 THE OKINAWA TIMES morning + evening
128 THE RYUKYU SHIMPO morning + evening

Kagoshima

circulation
2007

Id.
No.

Okinawa

Table 1. 2007 Circulation and penetration rates, sample newspapers

Table 2. Random-parameter logit estimate of utility function
Variable
Subscription price (yen per mo.) pj

Parameter

s.e.

z

𝜶

-0.00073 0.00003-23.8

s.d. in subscription price randomcoefficient𝝈0.00031 0.00005

7.0-0.143

0.057

-2.5

× Household annual income =less than 1 million yen
1million yen up to 2 million yen
2 million yen up to 3 million yen
3 million yen up to 4 million yen
4 million yen up to 5 million yen
5 million yen up to 6 million yen
6 million yen up to 7 million yen
7 million yen up to 8 million yen
8 million yen up to 9 million yen
9 million yen up to 10 million yen
10 million yen up to 12 million yen
12 million yen up to 15 million yen
15 million yen up to 20 million yen
20 million yen up to 30 million yen
30 million yen or more

-0.055-0.097-0.050-0.005
0.028
0.039
0.075
0.096
0.080
0.084
0.129
0.153
0.135
0.113
0.191

0.020
0.016
0.015
0.014
0.014
0.015
0.016
0.017
0.019
0.019
0.021
0.027
0.031
0.053
0.087

-2.8
-5.9
-3.4
-0.4
1.9
2.6
4.7
5.5
4.2
4.3
6.1
5.7
4.3
2.1
2.2

× Age, head of household =up to 24 yrs.
25 yrs to 44 yrs
45 yrs to 64 yrs
65 yrs or more

0.271
0.400
0.603
0.755

0.050
0.056
0.057
0.059

5.4
7.2
10.5
12.7

× Household annual income =less than 1 million yen
1million yen up to 2 million yen
2 million yen up to 3 million yen
3 million yen up to 4 million yen
4 million yen up to 5 million yen
5 million yen up to 6 million yen
6 million yen up to 7 million yen
7 million yen up to 8 million yen
8 million yen up to 9 million yen
9 million yen up to 10 million yen
10 million yen up to 12 million yen
12 million yen up to 15 million yen
15 million yen up to 20 million yen
20 million yen up to 30 million yen
30 million yen or more

0.176
0.233
0.309
0.394
0.287
0.290
0.359
0.516
0.495
0.625
0.656
0.771
0.844
0.969
1.089

0.133
0.105
0.073
0.063
0.062
0.063
0.063
0.067
0.077
0.073
0.069
0.080
0.102
0.176
0.217

1.3
2.2
4.2
6.3
4.6
4.6
5.7
7.8
6.5
8.6
9.5
9.7
8.3
5.5
5.0

Mean of random coefficient𝜷:ln pages of content per month lnkj
lnkj

lnkj

Morning-and-Evening subscription
to National newspaper

35

Variables.e.

z-0.187
0.487
0.553
0.438
0.365
0.465
0.447
0.452
0.699
0.659
0.495
0.651
0.727
0.754
1.267

0.192
0.116
0.079
0.071
0.075
0.076
0.079
0.089
0.102
0.103
0.101
0.130
0.171
0.305
0.300

-1.0
4.2
7.0
6.2
4.9
6.1
5.6
5.1
6.9
6.4
4.9
5.0
4.3
2.5
4.2

× Asahi
MainichiYomiuri
Sankei-0.647-1.266-0.339-1.808

0.030
0.040
0.029
0.066

-21.4
-31.9
-11.9
-27.4

Head of household highest educationlevel is college or above
× Asahi
MainichiYomiuri
Sankei

0.272-0.471-0.152-1.028

0.036
0.048
0.039
0.079

7.6
-9.9
-3.9
-13.0

Asahi, Mainichi, Yomiuri

× Th. Km from Tokyo, squared-0.010

0.000

-41.3

Sankei
ChunichiChugokuNishi Nippon

×
×
×
×

-0.056-0.211-0.932-0.664

0.002
0.021
0.064
0.043

-26.8
-10.1
-14.6
-15.5

Morning-and-Evening subscription
to Local or Bloc newspaper

Parameter× Household annual income =less than 1 million yen
1million yen up to 2 million yen
2 million yen up to 3 million yen
3 million yen up to 4 million yen
4 million yen up to 5 million yen
5 million yen up to 6 million yen
6 million yen up to 7 million yen
7 million yen up to 8 million yen
8 million yen up to 9 million yen
9 million yen up to 10 million yen
10 million yen up to 12 million yen
12 million yen up to 15 million yen
15 million yen up to 20 million yen
20 million yen up to 30 million yen
30 million yen or more

Participates in local festivals andholiday events

Th. Km from Osaka, squared
Th. Km from Aichi, squared
Th. Km from Hiroshima, squared
Th. Km from Fukuoka, squared

n=27,778
Chi squared [65 d.f.]= 132,971
Log likelihood function= -51,966
Restricted log likelihood= -118,451
Inf.Cr.AIC=104062 AIC/N = 3.745

36

Table 3. Parameters of Newspaper Pricing and Content, (Based on Tbl. 2 Mixed-Logit Estimates of Utility)

𝑝𝑠1 ,

𝑠1 ,

𝑝𝑠2

𝑠2

3,007

4,478,447

3,925

3,588,260

3,007

2,510,628

3,925

1,463,199

3,007

6,163,453

3,925

3,868,988

2,950

1,567,455

3,925

633,154

3,007

564,517x

3,925

639,634

254

x

3,000

255,976

161

2,600

107,369

3,007

231,437

3,007

391,485

ID
m-e
no.

Newspaper
morning𝑘𝑚

𝑘𝑒

Elasticity andCross-Elasticity w.r.t

Cross-Elasticity w.r.t

Subscription Price

Pages of Content

𝑝𝑠2 𝑠2
𝑝𝑠1 𝑠1

ξ1

1.05

1.81

ξ2

ξ12

ξ21

𝜆2

1
𝜆1

1−

1
𝜆2

𝜃1𝑒

0.41

-0.03

𝜃2𝑚

𝜃2𝑒

(𝑓 + 𝑐̅ 𝑠1 + 𝑠2 )𝑘𝑚
𝑝𝑠1 𝑠1

THE ASAHI SHIMBUN morning + evening

13

MAINICHI SHIMBUN morning

14

MAINICHI SHIMBUN morning + evening

25

YOMIURI SHIMBUN morning

26

YOMIURI SHIMBUN morning + evening

49

SANKEI SHIMBUN morning

50

SANKEI SHIMBUN morning + evening

54

HOKKAIDO SHIMBUN

morning55

HOKKAIDO SHIMBUN

morning + evening

56

TOO NIPPO morning + evening

58

DAILY TOHOKU

59

THE IWATE NIPPO morning + evening

61

THE KAHOKU SHIMPO morning

62

THE KAHOKU SHIMPO morning + evening

x

3,925

109,871

134

63

AKITA SAKIGAKE SHIMPO morning + evening

x

3,007

260,884

123

65

YAMAGATA SHIMBUN morning + evening

x

3,007

211,003

144

67

FUKUSHIMA MINPO

2,905

303,626

586

1.40

1.40

0.29

0.42

0.30

68

FUKUSHIMA MINYU

2,905

201,876

606

1.51

1.51

0.34

0.27

0.18

69

THE IBARAKI SHIMBUN

2,905

123,136

534

1.78

1.78

0.44

0.22

0.13

x

x

x

x

546

0.76
184

595

576

608

0.10

1.81

1.52

0.58

613

1.59

0.37

0.44

1.26

0.20

1.48
1.14

0.37

1.79

0.32
1.14

0.58
1.86

1.33
0.47

-0.07

0.40

-0.09

1.04

1.04

1.16

1.16

0.20
0.25

-0.19

0.29

0.09

0.34

0.27
0.22

0.29
0.43

0.12

0.21
0.28

0.13

1.14

37

0.43

0.33

0.25

0.23
0.34

-0.02

0.44
0.28

0.46

-0.03
-0.05

0.44

0.89

1.48
141

0.45

0.21
0.36

-0.04
0.41

0.42

-0.02

0.45

1.80

1.26

460

0.39

1.82

0.66

0.43

𝑓 + 𝑐̅𝑠2 𝑘𝑚 + 𝑘𝑒
𝑝𝑠2 𝑠2

0.39
-0.06

0.46

1.81

0.20

1.84

0.43

1.65

0.07

0.46

1.87

0.23

2.27

1.48

1.77

0.14

1.89

1.85

0.17

2.16

0.41
1.48

0.24

2.25

0.82
0.41

227

1.88

0.76
0.82

351

2.15

0.38

𝜃1𝑚

2

1.05

1.61

1−

THE ASAHI SHIMBUN

200

0.15

𝜆1

1

x

595

Elasticity and

-0.14

0.25
0.27

-0.16

0.31

-0.03

0.04

0.26

0.25

0.13

0.27

0.23

Elasticity andElasticity andCross-Elasticity w.r.t

Cross-Elasticity w.r.t

Subscription Price

Pages of Content

𝑝𝑠1 ,

𝑠1 ,

Newspaper

𝑝𝑠2

𝑠2

70

SHIMOTSUKE SHIMBUN

2,950

321,807

522

1.82

1.82

0.45

0.45

0.25

71

THE JOMO SHINBUN

2,950

310,175

675

1.86

1.86

0.46

0.41

0.22

74

THE TOKYO SHIMBUN morning

2,550

304,619

592

1.21

0.17

0.38

75

THE TOKYO SHIMBUN morning + evening

3,250

280,889

76

KANAGAWA SHIMBUN

3,100

218,041

562

77

NIIGATA NIPPO morning

3,007

439,570

600

78

NIIGATA NIPPO morning + evening

3,925

55,78479

KITANIPPON SHIMBUN morning

2,987

250,20181

THE HOKKOKU SHIMBUN morning + evening

3,925

84,80882

THE HOKKOKU SHIMBUN morning

3,007

258,466

728

0.43

1.62

0.54

1.48

0.32

0.55

-0.27

0.28

83

THE HOKURIKU CHUNICHI morning

2,905

93,152

715

0.15

1.77

0.25

1.71

0.41

0.25

-0.25

0.09

84

THE HOKURIKU CHUNICHI morning + evening

3,870

10,23885

FUKUI SHIMBUN

2,650

209,144

600

1.51

1.51

0.34

0.38

0.25

86

THE NIKKAN KENMIN FUKUI

2,100

40,165

628

1.10

1.10

0.09

0.24

0.22

87

YAMANASHI NICHINICHI SHIMBUN

3,007

208,133

570

1.68

1.68

0.41

0.42

0.25

88

SHINANO MAINICHI morning

3,007

432,739

722

1.45

0.31

0.33

89

SHINANO MAINICHI morning + evening

3,925

52,49290

GIFU SHIMBUN morning

2,900

146,283

91

GIFU SHIMBUN morning + evening

x

3,370

31,070156

92

SHIZUOKA SHIMBUN morning + evening

x

2,900

717,229

154

94

THE CHUNICHI SHIMBUN morning

3,000

2,124,288

ID
m-e
no.

x

x

x

x

x

𝑘𝑚

𝑘𝑒

𝑝𝑠2 𝑠2
𝑝𝑠1 𝑠1

1.18
203

ξ2

1.51

1.18

ξ12

ξ21

0.20
1.94

0.17

1.64

0.17

747

0.60
1.90

166

0.43

0.16
146

610

1.67

0.16
0.25

1.80
1.82

0.25

1.91

1.78

38

𝜃1𝑒

1.35

-0.29

0.00

1.14

0.12

1.49

0.33
0.39

0.32

0.56

0.20
0.36

0.00

0.29
-0.17

0.40

0.59

-0.17
0.00

0.45

0.22

0.13

0.06

0.40

𝑓 + 𝑐̅𝑠2 𝑘𝑚 + 𝑘𝑒
𝑝𝑠2 𝑠2

0.25

0.21

0.76

1.64

0.40

-0.15

0.26

1.06

(𝑓 + 𝑐̅ 𝑠1 + 𝑠2 )𝑘𝑚
𝑝𝑠1 𝑠1

0.20

-0.16
0.39

𝜃2𝑒

0.42
-0.12

0.73

1.66

𝜃2𝑚

-0.04

0.37

0.45

0.35

0.20

𝜃1𝑚

0.30

1.49
0.40

1
𝜆2

1.43

0.54
0.45

1−

0.37

0.29

0.50

1
𝜆1

0.46

0.29

2.29

1−

1.85

1.65
2.35

0.15

𝜆2

1.58

0.48

1.65
141

𝜆1

0.36

1.85

155

612

ξ1

-0.04

0.35

0.27

0.41

0.27
0.26

ID
m-e
no.

Newspaper
x

𝑝𝑠1 ,

𝑠1 ,

𝑝𝑠2

𝑠2

3,925

650,297

3,007

192,119

3,925

317,881

3,007

307,099

3,925

254,782𝑘𝑚𝑘𝑒

𝑝𝑠2 𝑠2
𝑝𝑠1 𝑠1215

0.40

Elasticity andElasticity andCross-Elasticity w.r.t

Cross-Elasticity w.r.t

Subscription Price

Pages of Content

ξ1

ξ2

ξ12

𝜆1

1−

1
𝜆1

1
𝜆2

𝜃1𝑚

𝜃1𝑒

𝜃2𝑒

-0.17

0.44

(𝑓 + 𝑐̅ 𝑠1 + 𝑠2 )𝑘𝑚
𝑝𝑠1 𝑠1KYOTO SHIMBUN morning

98

KYOTO SHIMBUN morning + evening

99

KOBE SHIMBUN morning

100

KOBE SHIMBUN morning + evening

102

NIHONKAI SHIMBUN

1,995

175,497

597

0.68

0.68

103

SANIN CHUO SHIMPO

2,855

180,878

529

1.20

1.20

104

THE SANYO SHIMBUN morning

3,007

394,612

661

1.47

105

THE SANYO SHIMBUN morning + evening

3,925

72,015

106

THE CHUGOKU SHIMBUN morning

3,007

644,166

107

THE CHUGOKU SHIMBUN morning + evening

3,925

73,628108

TOKUSHIMA SHIMBUN morning

3,007

200,102109

TOKUSHIMA SHIMBUN morning + evening

3,925

54,622

110

SHIKOKU SHIMBUN

3,007

208,307

601

1.27

1.27

0.21

0.21

0.17

111

EHIME SHIMBUN

3,000

318,391

592

1.21

1.21

0.17

0.30

0.25

112

KOCHI SHIMBUN morning

3,000

84,657647

113

KOCHI SHIMBUN morning + evening

3,770

143,219114

THE NISHINIPPON morning

3,007

679,137

115

THE NISHINIPPON morning + evening

3,925

175,518

116

SAGA SHIMBUN

2,905

141,023

605

1.29

1.29

0.23

0.24

0.18

117

NAGASAKI SHIMBUN

3,000

190,034

577

1.00

1.00

0.00

0.17

0.17

x

x

x

x

x

x

x

172
587

2.16
1.08

185

136
624

544

2.13
177

563
182

0.31

1.49

1.43
1.67
1.55
2.04

0.28

0.23

0.32

0.44

0.00

0.35
0.00

0.31

0.33

0.25
1.28

0.22

0.05

0.33

0.00

0.33

0.59
-0.15

0.35

0.35
0.31

-0.17

0.46

0.24
0.19

0.00

0.02

0.32

0.24

-0.08
-0.17

1.87

0.64

39

0.17

0.16

1.34

0.26
0.25

0.64

0.23

0.49

0.17

1.02

0.61

0.16
0.36

-0.24

0.84

0.50

0.22

0.38

0.00

0.46

𝑓 + 𝑐̅𝑠2 𝑘𝑚 + 𝑘𝑒
𝑝𝑠2 𝑠2

0.28
-0.19

0.43

0.30

1.19

0.79

-0.11

0.99

0.52

1.83

0.35

1.43

0.66

0.34
0.50

1.85

0.24

1.91

0.34

1.53

0.44

1.57

0.34
1.99

0.24

2.14

2.13
0.34

0.29

1.56

0.36

1.52
0.19

2.44

0.15
0.36

185

1.73

0.24
0.15

162

2.31

1.08

0.24

0.23

0.37

𝜃2𝑚

97

1.82

1.58

1−

THE CHUNICHI SHIMBUN morning + evening

2.16

0.35

𝜆2

95

585

2.18

ξ21

0.30

-0.04

0.16
0.25

-0.25

0.38

0.21

Elasticity andElasticity andCross-Elasticity w.r.t

Cross-Elasticity w.r.t

Subscription Price

Pages of Content

𝑝𝑠1 ,

𝑠1 ,

Newspaper

𝑝𝑠2

𝑠2

118

KUMAMOTO NICHINICHI morning

3,007

274,491

119

KUMAMOTO NICHINICHI morning + evening

x

3,364

90,269167

120

OITA GODO SHIMBUN morning + evening

x

3,466

234,159

205

122

MIYAZAKI NICHINICHI

2,905

232,578

654

123

MINAMINIPPON SHIMBUN morning

3,007

362,219

591

124

MINAMINIPPON SHIMBUN morning + evening

x

3,567

26,034

154

126

THE OKINAWA TIMES morning + evening

x

3,160

206,569

137

1.22

1.22

0.18

0.20

0.17

128

THE RYUKYU SHIMPO morning + evening

x

3,160

205,465

134

1.22

1.22

0.18

0.20

0.17

ID
m-e
no.

𝑘𝑚

𝑘𝑒

621

𝑝𝑠2 𝑠2
𝑝𝑠1 𝑠1

ξ1

0.37

1.56

0.37

ξ2

ξ12

ξ21

0.94
1.45

𝜆1

𝜆2

1.05
0.56

1−

1
𝜆1

1−

1
𝜆2

0.05

𝜃1𝑚

𝜃1𝑒

0.31

-0.16

0.93

1.32

𝜃2𝑚

(𝑓 + 𝑐̅ 𝑠1 + 𝑠2 )𝑘𝑚
𝑝𝑠1 𝑠1

𝑓 + 𝑐̅𝑠2 𝑘𝑚 + 𝑘𝑒
𝑝𝑠2 𝑠2

0.21
-0.11

1.32

𝜃2𝑒

0.24

0.22
0.20

0.15

0.14
0.09

1.38

0.09

1.00
1.38

0.80
0.74

0.38

-0.13

0.25

0.39
-0.11

0.32

MEAN

590,764

604

175

0.66

1.56

1.80

0.43

0.40

1.41

1.31

0.31

0.28

0.34

-0.08

-0.13

0.35

0.26

0.11

S.D.

1,094,598

58

45

0.61

0.27

0.43

0.27

0.17

0.32

0.42

0.12

0.16

0.10

0.08

0.08

0.10

0.09

0.22

40

Table 4. Regression estimates relating newspaper ad pricing to circulation.
OLS estimates of
[22]

−1

𝑝𝑎 = 𝑓𝑎

1 −1(1 − ξ )𝑎where 𝑝𝑎 = 𝑝𝑎𝑚 or 𝑝𝑎𝑒 ,

+ 𝑐̅

−1

1 −1

(1 − ξ )𝑎𝑠 +𝑠 + 𝑠2 , 𝑖𝑓 𝑝𝑎 = 𝑝𝑎𝑚and 𝑠 = { 1𝑠2, 𝑖𝑓 𝑝𝑎 = 𝑝𝑎𝑒

Ad ratefor legal
notice(per cm)

Intercepts.e.

Number of subscribers
s.e

R-SquareAdvertising rate for display ad per page ofads (=15 dan)

1-dan rate

5-dan rate

15-dan rate

8,184,111

2,455,071

2,205,316

1,944,448

669,478

387,169

367,110330,189

10.35

6.26

5.96

5.37

0.38

0.22

0.21

0.19

0.89

0.90

0.90

0.90

n=96

Note. The sample includes observations for each edition of each newspaper: morning andevening editions, national and local papers.

41

Table 5. GMM estimate of two-equation system, based on 1-dan, 5-dan and 15-dan rate for display ad.
Equation 1—Advertising price per page of ads:

𝑝𝑎 =

+

1𝑠

Equation 2—Demand for advertising:ln 𝑎 = 𝛽 + 𝜉𝑎 𝑙𝑛 /𝑠 + 1 + 𝛽1 ln 𝐴 𝑔 𝑛𝑐𝑜𝑚𝑒 + 𝛽2 𝑐𝑛𝑡 𝑜𝑙𝑙𝑒𝑔𝑒
Instruments for s: (1) pages of content per month, (2) newspaper home prefecture number of households if bloc newspaper or local
newspaper, (3) dummy=1 if national newspaper, and =0 if not.
Parameter
Variable
1-dan rate
5-dan rate
15-dan rate
pa
ln a
pa
ln a
pa
ln a
Intercepts.esNumber of subscribers

1s.eIntercept

1,464,644

1,232,950

1,030,722

171,192

160,970

143,329

6.46

6.23

5.67

0.39

0.38

0.35

𝛽
s.e

28.01

29.08

33.75

28.50

26.07

25.24

-1.30

-1.27

-1.27

0.54

0.53

0.55

-2.81

-3.02

-3.80

4.79

4.39

4.25

-5.06

-4.71

-3.75

5.89

5.50

5.35

Nat. log of advertising rate for display

𝑙𝑛

/𝑠 +

1

ad

per page of ads per subscriber as

predicted by ad price equation

𝜉𝑎s.eln 𝐴 𝑔 𝑛𝑐𝑜𝑚𝑒

Nat. log of subscriber average
household income

𝛽1s.e

𝑐𝑛𝑡 𝑜𝑙𝑙𝑒𝑔𝑒

Percent of subscribers college
educated

𝛽2
s.e

63

Number of observations
42

60

60

Table 6. OLS regression estimate of subscription price equation.
Estimating equation:
Morning edition:1

𝑝𝑎𝑚 𝑎𝑚1

𝑠1 +𝑠2[23] (1 − 𝜆 ) 𝑝𝑠1 = 𝑐 𝑚 + 𝑐̅ 𝑎𝑚 + 𝑘𝑚 −Morning-and-evening edition ,if morning-only subscriptions are not offered:[24]

1

𝑝𝑎𝑚 𝑎𝑚2𝑠2(1 − 𝜆 ) 𝑝𝑠2 = 𝑐 𝑚 + 𝑐 𝑒 + 𝑐̅ 𝑎𝑚 + 𝑘𝑚 + 𝑎𝑒 + 𝑘𝑒 −−𝑝𝑎𝑒 𝑎𝑒𝑠2

Evening edition, if morning-only subscriptions are also offered:
[25]

1

1

𝑝𝑎𝑒 𝑎𝑒21𝑠2(1 − 𝜆 ) 𝑝𝑠2 − (1 − 𝜆 ) 𝑝𝑠1 = 𝑐 𝑒 + 𝑐̅ 𝑎𝑒 + 𝑘𝑒 −Parameters to be estimated: 𝑐 𝑚 , 𝑐 𝑒 , 𝑐̅,/𝑠

Dependent variable = Left-hand side of [23], [24], or [25].
Dummy=1 ifnewspaper for which

Advertising

p1=3007 yen per mo.

Morning

Evening

Pages

revenue per

and p2=3925 yen perdeliverydeliverypersubscriber

mo.

month

Morning

Evening

editionedition

𝑐𝑚

𝑐𝑒

(k+a)

𝑝𝑎 𝑎
𝑠

Coefficientestimate

-96

209

475

241

0.62

-0.09

s.e.

121

131

186

223

0.42

0.04

F

0.62

2.54

6.49

1.17

Pr>F

0.43

0.12

0.01

0.29

R-Square
n

0.90
51

43

Figure 1. Morning circulation in 2007 of Japan’s national, local and regional newspapers in each prefecture, ranging from west (Okinawa) to east
(Hokkaido).
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0

Kagoshima Oita
Nagasaki Fukuoka Ehime TokushimaHiroshima Shimane Wakayama Hyogo
Kyoto
Mie
Shizuoka Nagano
Fukui
Toyama Kanagawa Chiba
Gumma Ibaraki Yamagata Miyagi Aomori
Okinawa Miyazaki Kumamoto Saga
Kochi Kagawa Yamaguchi Okayama Tottori
Nara
Osaka
Shiga
Aichi
Gifu Yamanashi Ishikawa Niigata Tokyo Saitama Tochigi Fukushima Akita
Iwate Hokkaido

Local and Regional papers

Sankei

Asahi

Yomiuri

Mainichi

Source: Chou-Mai-Yomi-Kei VS chihoushi no shea arasoi, dokusen nyuushu, tadoufuken ichiran (Asahi Mainchi Yomiuri Nikkei vs regional
newspapers, rivalry for shares and monopolization, summary of number of copies issued in each prefecture), Facta, July 2007.
http://facta.co.jp/article/200707008.html

44

Figure 2. Marginal value of pages of content per month, based on mixed-logit estimate ofutility function.

Average marginal value of pages of content per month, per subscriber, for each edition(morning, and morning-and-evening), of each newspaper
1.6

1.4

1.2
Yen per page
1

0.8

0.6

0.4

0.2

0
0

200

400

600

800

pages of content per month: Km or Km+Ke

45

1000