Advertising Spending and Media Bias: Evidence from News Coverage of Car Safety Recalls
Do news media bias content in favor of advertisers? We examine the relationship between advertising by auto manufacturers in U.S. newspapers and news coverage of car safety recalls. This context allows us to separate the influence of advertisers, who prefer less coverage, from that of readers, who demand more. Consistent with theoretical predictions, we find that newspapers provide less coverage of recalls by their advertisers, especially the more severe ones. Competition for readers from other newspapers mitigates bias, while competition for advertising by online platforms exacerbates it. Finally, we present suggestive evidence that lower coverage increases auto fatalities.
Ananya Sen is a Postdoctoral Associate at the MIT Sloan School of Management.His research interests include the economics of the media, social media, the internet and more broadly the digital economy. He mainly uses empirical techniques, often backed by simple theoretical models, to answer research questions. He received a Ph.D in Economics from the Toulouse School of Economics. Before moving to Toulouse, he did the Economics Tripos at Cambridge University, prior to which he obtained a B.A. (Honors) in economics at St. Stephen’s College, Delhi.