Access and Exposure to Local News Media in the Digital Era: Evidence from U.S. Media Markets

Using a new comprehensive survey of adults in large U.S. media markets we show that minority and low-skill individuals, who are heavily exposed to shocks to the local economy, typically have stronger preferences for and stronger ex- posure to local news than high-skill and white individuals. At the same time, these disadvantaged individuals have been negatively affected by the impact of the digital revolution on news provision. In particular, high-skill and white indi- viduals have more rapidly embraced online and social media while low-skill and minority individuals still heavily rely on local television and other traditional news providers. These differences in provider choices are important because the digital revolution has reduced the quality of traditional news providers while the quality and quantity of online and social media have substantially in- creased. To gain additional insights into the welfare consequence of the digital revolution and assess potential policy interventions, we develop and estimate a model of news production and demand for local news. Our model is based on a time-allocation, discrete bundle-choice framework. Our findings suggest that the loss of the local newspaper (television) reduces welfare on average by $923 ($1064) which is well above the annual subscription costs in most markets. Finally, we study policies that subsidize online or social media to offset the loss of the local newspaper or television station.