Branding News with Political Opinion

Should the CEO’s of newspaper care about the political profile of their newspaper? We investigate whether the political beliefs of the consumers in a market influence the sale. A demand model is estimated using a structural two-step estimation technique that allows us to account for the endogeneity arising from the editor’s strategic choice on political profile. The demand is generally well behaved. Unit elastic demand cannot be rejected for our monopoly markets. Our results suggest that political newspapers face a higher demand than independent newspapers all other things equal. This implies that if the political composition allows for a political newspaper, potential profits increase.