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Political Economy of Media

Paper Session

Saturday, Jan. 4, 2025 2:30 PM - 4:30 PM (PST)

San Francisco Marriott Marquis, Foothill F
Hosted By: Association for Comparative Economic Studies & Society for Institutional and Organizational Economics
  • Chair: Ruixue Jia, University of California-San Diego

Capital, Censorship and Cinema

Lingtian Bu
,
Renmin University of China
Ruixue Jia
,
University of California-San Diego
Meng Miao
,
Renmin University of China
David Strömberg
,
Stockholm University

Abstract

By examining Chinese cinema data, we study the impact of financial motivations of film studios, supported by venture capital, on their thematic selections within a censorship environment. Our analysis concentrates on the effects of the Value Adjustment Mechanism (VAM), a common venture capital agreement linking studio executives' pay to their box office performance shortly after acquisition. Our results indicate that VAM leads to a noticeable increase in the production of main-melody films -- a category that promotes a positive image of the state and is less susceptible to censorship. This shift in thematic focus appears to be driven more by the need to ensure market access in a censored system rather than an increased demand for such films. Our study highlights how market incentives, in conjunction with government control over market entry, can actually reinforce control.

Online Echo Chambers: Evidence from Article-Level Slant

Luca Braghieri
,
Bocconi University
Sarah Eichmeyer
,
Bocconi University
Ro'ee Levy
,
Tel Aviv University
Markus Mobius
,
Microsoft Research
Jacob Steinhardt
,
University of California-Berkeley
Ruiqi Zhong
,
University of California-Berkeley

Abstract

There is widespread concern that the online news ecosystem produces highly polarized content and that extreme content gets further amplified through social media distribution channels. Methodological limitations in estimating content-based slant at the article level have made evaluating these claims difficult. We use data on one million news articles published online by U.S. news outlets in 2019, in combination with recent advances in natural language processing, to obtain a fine-grained measure of content-based article-level slant. We report four main findings. First, the majority (65%) of the variance in slant across articles arises within outlets, rather than across outlets, and thus, is not taken into account by standard measures of slant. Second, most news produced is centrist, but the tails of the slant distribution are thick. Third, extreme content is much more likely to get shared widely on Facebook. Fourth, consistent with concerns over echo chambers, left- and right-leaning users get exposed to and consume highly congenial news articles on Facebook, often from the same outlet.

The Profitability of Diversity in the Media

Lena Song
,
University of Illinois-Urbana-Champaign

Abstract

Diversity in media content has important political and societal implications. Using a novel dataset of all commercial radio stations across the U.S., I study radio stations serving Black audiences and their profitability during the post-war Jim Crow era. There was less content available for Black audiences compared to White audiences, while stations offering more programming for Black audiences were significantly more profitable. Similar patterns are not observed for stations with foreign-language programming. One plausible explanation is firm-owner discrimination, where some firms "left money on the table" by not offering Black-oriented programming, allowing stations that did to achieve higher profits.
JEL Classifications
  • P0 - General
  • L0 - General