Newspaper quality, Pulitzer Prizes, and newspaper circulation.

The analysis assumes that causality runs from Pulitzer Prizes to circulation but alternatively, papers with large circulations might be more likely to win Pulitzers. The authors have attempted to mitigate reverse causality by using Pulitzers awarded between 1987-97 and circulation in 1997, so 1997 circulation cannot cause the winning of Pulitzers 10 years earlier. However, circulation is highly correlated from year to year so resources available in 1987 might have produced both Pulitzers over the next decade and circulation in 1997. Ranking papers by circulation certainly reveals that small papers might lack the resources to win Pulitzers. Papers in the top quintile of circulation in 1997 won 91 percent of the Pulitzers over the sample period. (7)

Consequently, the circulation model was re-estimated using only papers with Daily circulation in excess of 100,000 in 1997. These papers have the resources which should allow them to pursue Pulitzer prizes if they wish. Thus, including only these 80 largest papers restricts attention to papers with significant resources. Table 5 presents estimates of a parsimonious specification for Daily and Sunday circulation for these papers. Only results for the quadratic Pulitzer specification are presented, but the results are similar for the binary Pulitzer specification. Winning Pulitzer Prizes increases circulation for the largest papers, with the PULITZER variable positive and significant at the 1 percent level and the [PULITZER.sup.2] variable negative and significant at the 5 percent level. The first Pulitzer increases Daily circulation for the largest papers by 11 percent and Sunday circulation by 12 percent. Note that these estimates are slightly smaller than for the parsimonious specifications for the full data set, which suggests that in the full data set, a portion of the circulation effect of prizes is perhaps actually resources. However, the results still indicate a quantitatively significant effect of prizes on circulation.

Finally, note that the two measures of political preferences, TURNOUT and CLINTON, fail to attain significance in any of the specifications reported. The insignificance of CLINTON stands in contrast to the results of Goff and Tollison [1990] and Sutter [2002] that Democratic vote share increases total newspaper circulation in states and MSAs, respectively. Their results suggest that liberals have a greater demand for news, which might lead news organizations to supply biased, liberal news in an effort to cater to their audience's preferences. This paper considers the circulation of individual papers instead of total circulation. The lack of an impact of CLINTON on the circulation of leading metropolitan papers suggests that it is smaller, suburban papers which drive the apparent relationship between circulation and political preferences.

Conclusion

Many journalists and communications scholars question whether a profit-maximizing, commercial media can supply news of the quality needed by citizens in a democracy. Consumers have difficulty evaluating the quality of the news, so asymmetric information provides one potential reason why news organizations may fail to supply high quality news. Alternatively, consumers may not value the product dimensions which represent high quality news to journalists. For-profit news organizations cannot be expected to provide types of news which consumers do not value.

This paper has investigated the relationship between news quality and newspaper circulation using a very prominent measure of quality, Pulitzer Prizes. These prestigious awards provide a readily observable measure of newspaper quality as judged by journalists. Papers which have recently won Pulitzers have higher Daily and Sunday circulation, even when controlling for the economic, demographic, and media characteristics of the newspaper markets. The effect of Pulitzers on circulation is not merely highly statistically significant but also quantitatively large, with Daily circulation 55 percent higher for papers which have recently won prizes, and is robust across different specifications of the Pulitzer Prize variable and circulation. The magnitude of the effect is reduced, but still significant, even among a restricted sample of the largest circulation papers in the country.

While many scholars are skeptical about the ability of commercial news organizations to supply quality journalism, Kovach and Rosenstiel [2001] suggest that, in the long run, news organizations with high standards attract audiences and profit. They note the long standing conflict between hard news and information and soft, entertaining, titillating news and conclude that, "history over a longer term suggests that the organizations that tip toward the information end of the spectrum tend to prevail over those that tip toward the entertainment end" [p. 153]. The results of this study indicate that quality does matter for circulation, at least quality as measured by Pulitzer Prizes. If quality produces a larger audience, owners of media companies can rationally invest in quality journalism. Of course, it has not been established that the extra revenue due to the circulation boost from winning Pulitzers exceeds the cost required to produce Pulitzer quality journalism. However, the impact on circulation is quantitatively significant, suggesting that quality may well pay.

Footnotes

(1) Note that even though each person may acquire only a small amount of information, the overall amount of information generated might be sufficient [Martinelli, 2003].

(2) Voters also use easily observable information about the performance of the economy at large in evaluating the performance of politicians [Grief and McGarrity, 19981.

(3) The categories for journalism are Public Service, Breaking News Reporting, Investigative Reporting, Explanatory Reporting, Beat Reporting, National Reporting, International Reporting, Feature Writing, Commentary, Criticism, Editorial Writing, Editorial Cartooning, Breaking News Photography, and Feature Photography. The list of awards was obtained from the website of the Pulitzer Prize board at www.pulitzer.org.

(4) The coefficient on POPULATION for Daily is significantly less than 1.0, which indicates that a circulation per capita specification would be inappropriate. All of the specifications presented here were also estimated with the circulation of the papers instead of logged circulation. In no case did the Pulitzer variables ever fail to attain significance.

(5) The authors further explored whether all Pulitzer Prizes had an equal effect on circulation, or whether readers considered some Pulitzers more indicative of quality than others. One variable was created for the reporting categories (Public Service, General News, Investigative, Explanatory, Specialized, National, International, and Feature Writing), a second variable was created for the remaining categories, and the model was re-estimated. Both Pulitzer variables significantly increased circulation and a Wald test failed to reject the null hypothesis of equal coefficients for the variables.

(6) The models reported in this paper were also estimated with dummy variables corresponding to Census regions. The regional dummies were not jointly significant and the significance of the Pulitzer Prize variables were not affected, so the results are not reported here.

(7) The authors estimated a probit model of whether a paper won at least one Pulitzer as a function of circulation and the other control variables in the model. Circulation (either Daily or Sunday) was a positive and significant determinant of winning Pulitzers.

References

Akerlof, George A. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," Quarterly Journal of Economics, 84, 3, August 1970, pp. 488-500.

Anderson, William L. "The Washington Post and Jimmy's World," American Journal of Economics and Sociology, forthcoming, 2002.

Anderson, William L.; Sutter, Daniel. "Market Forces, the Quality of News, and the 2000 Presidential Election," unpublished manuscript, University of Oklahoma, 2003.

Baumol, William J. "Macroeconomics of Unbalanced Growth," American Economic Review, 57, 1967, pp. 415-26.

Broadcasting and Cable Yearbook 1998, New Providence, N J: R. R. Bowker, 1998.

Chalk, Andrew. "Market Forces and Aircraft Safety: The Case of the DC-10," Economic Inquiry, 24, 1, January 1986, pp. 43-60.

Cranberg, Gilbert; Bezanson, Randall; Soloski, John. Taking Stock: Journalism and the Publicly Traded Newspaper Company, Ames, IA: Iowa State University Press, 2001.

Croteau, David; Hoynes, William. The Business of Media: Corporate Media and the Public Interest, Thousand Oaks, CA: Pine Forge Press, 2001.

Darby, Michael R.; Karni, Edi. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, 16, 1, April 1973, pp. 67-88.

Downs, Anthony. An Economic Theory of Democracy, New York, NY: Harper and Row, 1957.

Fallows, James. Breaking the News: How the Media Undermine American Democracy, New York, NY: Pantheon Books, 1996.

Goff, Brian; Tollison, Robert D. "Why is the Media so Liberal?" Journal of Public Finance and Public Choice, 8, 1, Jam-April 1990, pp. 13-21.

Grier, Kevin B.; McGarrity, Joseph P. "The Effect of Macroeconomic Fluctuations on the Electoral Fortunes of House Incumbents," Journal of Law and Economics, 41, 1, April 1998, pp. 143-61.

Horner, Johannes. "Reputation and Competition," American Economic Review, 92, 3, June 2002, pp. 644-63.

Jarrell, Gregg; Peltzman, Sam. "The Impact of Product Recalls on the Wealth of Sellers," Journal of Political Economy, 93, 3, June 1985, pp. 512-36.

Klein, Benjamin; Leffier, Keith B. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, 89, 4, August 1981, pp. 615-41.

Print Get the Mag Weekly Updates