Working Paper: CEPR ID: DP4989
Authors: Andrea Prat; David Strömberg
Abstract: What is the effect of liberalizing a country?s broadcasting system on the level of information of its citizens? To analyse this question, we first construct a model of state monopoly broadcasting where the government selects the amount of television news coverage of different public policy outcomes, and then sets public policy and political rents. Voters vote retrospectively given the news provided. In equilibrium, the incumbent provides some news coverage, and more so to groups for which reducing policy uncertainty is more important. We then introduce a profit-maximizing commercial channel. It provides more news coverage to groups of voters valuable to advertisers or underprovided by the state monopoly.We test our predictions on a panel of individuals interviewed in the elections before and after the entry of commercial TV in Sweden. We find that people who start watching commercial TV news increase their level of political knowledge more than those who do not. They also increase their political participation more. The positive informational effects are particularly valuable since commercial TV news attracts ex ante uniformed voters.
Keywords: commercial television; mass media; public service broadcasting; voter information
JEL Codes: L33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| introduction of commercial TV (M38) | increased political knowledge (D72) |
| introduction of commercial TV (M38) | increased political participation (D72) |
| viewing commercial TV news (M38) | increased political knowledge (D72) |
| viewing commercial TV news (M38) | increased political participation (D72) |
| viewing commercial TV news (M38) | benefits to young and previously uninformed individuals (I24) |