Essays on Newspaper Economics.

This dissertation consists of two chapters that focus on estimating the economic impact of two major pricing changes witnessed recently in the U.S. newspaper industry. The first chapter investigates the optimality of the decision adopted by print newspaper publishers to increase subscription prices notwithstanding a declining preference among readers for newspaper consumption. Further, it proposes and evaluates theoretical explanations for the increasing subscription price trajectory in this market. Of the three available subscription options in print (Daily, Weekend and Sunday only), subscription prices increased more steeply for the Daily option; this is consistent with the view that newspapers are driving away low valuation Daily option readers but not Sunday, as Sunday contributes higher ad revenues. As an extreme case of this strategy, several newspapers have adopted a policy change by limiting production/distribution of the newspaper only to weekends. A counterfactual simulation shows the implications of such a policy change and offers implications for effective newspaper product portfolio management. Second, over the last few years, another popular strategy among newspaper publishers operating online editions is the creation of paywalls (i.e., the practice of charging online readers a subscription fee for accessing news content). News publishers' objectives from setting up paywalls are believed to be threefold: a) creating a new revenue stream by monetizing online news content in the reader market, b) preserving the more lucrative print subscription revenues by discouraging print readers from switching to free online newspapers, and c) increasing the newspaper's ability to charge higher ad rates by promoting a subscription base of paying readers. It is unclear whether charging readers for online access will unambiguously serve all the expected objectives especially since the paywalls run the risk of leading to heavy attrition of readers and hence, advertisers. The second chapter employs readership and advertising data for the New York Times, a newspaper that has been cited in the media for its successful paywall execution, to investigate the effects of its paywall launch on online readership, print circulation and online advertising revenues.PhDBusiness AdministrationUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/109057/1/adithyap_1.pd

The Minimum Wage and Consumer Nutrition

The U.S. Department of Agriculture estimates that one in nine U.S. households is “food insecure”: unable to purchase sufficient, or healthy food. Public policy advocates and politicians have pointed to the prevailing federal minimum wage as a culprit, labeling it a “starvation wage.” This study examines whether and to what extent increases to the minimum wage have improved the quantity and nutritional quality of food purchased by minimum wage earners, and what implications these potential changes in consumer behavior have for marketers. The authors show that households likely to be earning the minimum wage increase their calories purchased in response to minimum wage increases, and that these gains are predominantly found among households purchasing the least amount of food prior to the minimum wage rising. Although the authors do not find evidence that the average household improves the nutritional content of calories purchased, they do find evidence that the least healthy households (as measured by past purchases) buy more healthy foods in response to rising minimum wages. Overall, the findings suggest that higher minimum wages may not only help households afford more calories but also encourage some households to purchase more healthy calories. In addition, the authors find an increased openness among minimum wage households to purchasing new grocery items. This openness to trying previously unpurchased products offers promotion and product line planning opportunities to manufacturers. It also offers retailers with a nutrition-friendly brand image an opportunity to nudge consumers toward purchasing more healthy foods.</jats:p

Spillovers from Online Engagement: How a Newspaper Subscriber’s Activation of Digital Paywall Access Affects Her Retention and Subscription Revenue

Newspapers are increasingly reliant on subscription revenue as advertising spend shifts to online platforms. Many newspapers have implemented paywalls in an attempt to boost subscription revenue. We study whether and how paywalls can help newspapers boost subscription revenue by retaining existing subscribers. Most major newspapers offer free access to paywalled content to subscribers to the print edition, which may help the newspaper retain subscribers by making their subscriptions more valuable. We leverage variation in whether and when existing subscribers activated access to the paywall of a top 30 North American newspaper. Our identification strategy accounts for self-selection in subscribers’ decisions to activate paywall access. We find that a subscriber’s activation of digital access decreases the risk of her canceling her subscription by about 31% and increases her subscription revenue by 7%–12%. In other words, digital activation improves subscriber retention and the associated subscription revenue. This suggests a crosschannel spillover in which the online product (the paywalled website) increases customers’ valuation for the offline product (the printed newspaper). Our results have implications not only for the newspaper industry but also for firms in other industries that offer subscribers to one product free or subsidized access to a complementary product. This paper was accepted by Kartik Hosanagar, information systems. </jats:p

Supplemental Material, DS_10.1177_0022242918815163 - Paywalls: Monetizing Online Content

Supplemental Material, DS_10.1177_0022242918815163 for Paywalls: Monetizing Online Content by Adithya Pattabhiramaiah, S. Sriram, and Puneet Manchanda in Journal of Marketing</p

The Impact of Corporate Social Responsibility on Brand Sales: An Accountability Perspective

Consumers are increasingly mindful of corporate social responsibility (CSR) when making purchase and consumption decisions, but evidence of the impact of CSR initiatives on actual purchase decisions is lacking. This article introduces a novel brand accountability–based framework of consumer response to CSR initiatives, which categorizes CSR efforts as “corrective,” “compensating,” or “cultivating goodwill.” Leveraging a database of CSR press releases by leading consumer packaged goods brands, the authors examine the effect of the different types of CSR announcements on brand sales. The findings suggest that CSR initiatives that genuinely aim to reduce a brand's negative externalities (“corrective” and “compensating”) lift sales, whereas CSR actions focused on philanthropy (“cultivating goodwill”) can hurt sales. The authors propose two moderators—CSR reputation and CSR focus on environmental or social causes—and a mechanism for these effects, which they examine under controlled experimental settings. The experimental results show that, conditional on CSR reputation, consumers perceive varying degrees of sincerity in the different CSR types and that sincerity mediates the effect of CSR type on purchase intentions. Overall, the results suggest that consumers are more inclined to reward firms that directly reduce the negative by-products of their own business practices than to be impressed by public goodwill gestures. </jats:p

sj-pdf-1-jmx-10.1177_00222429211044155 - Supplemental material for The Impact of Corporate Social Responsibility on Brand Sales: An Accountability Perspective

Supplemental material, sj-pdf-1-jmx-10.1177_00222429211044155 for The Impact of Corporate Social Responsibility on Brand Sales: An Accountability Perspective by Dionne Nickerson, Michael Lowe, Adithya Pattabhiramaiah and Alina Sorescu in Journal of Marketing</p