DP12366 Advertising Spending and Media Bias: Evidence from News Coverage of Car Safety Recalls

Author(s): Graham Beattie, Ruben Durante, Brian Knight, Ananya Sen
Publication Date: October 2017
Keyword(s): advertising, car manufacturers, media bias, newspapers, safety recalls
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12366

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.