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Wednesday, May 25, 2016

Matthew Gentzkow on Newspapers and Politics

In case you missed this in yesterday's links (the full interview is much longer):

Interview with Matthew Gentzkow, by Douglas Clement. Editor, The Region: Before Matthew Gentzkow entered the field, the economics of media was largely uncharted territory. Today, media economics is flourishing thanks largely to him and his co-authors—particularly Jesse Shapiro... But Gentzkow’s expertise is not confined to media; he’s also a pioneer in methodology, empirical procedure and economic theory with landmark research on communication, social influence and marketing.
With unique insights, innovative technique, methodological rigor and massive databases he often creates for an express purpose, Gentzkow has answered questions about television, newspapers, product branding, competition, persuasion and politics that many scholars had asked but no one had answered convincingly.
Due to this work, we now know that newspaper media slant is driven mostly by the preferences of readers, not newspaper owners. And by examining browser data, he discovered that people don’t largely live in internet “echo chambers”—that is, they don’t exclusively visit sites that align with their political bent. Product brand preferences, he found, are established early in life and endure long after exposure to essentially identical, less expensive alternatives. These and dozens of other economic mysteries have yielded to his curiosity, insight and skill.
Gentzkow received the John Bates Clark Medal in 2014...
... Newspapers and politics Region: You’ve done a great deal of research on newspapers and particularly their relationship to politics. There certainly isn’t time to get to it all. But in a key, early paper with Shapiro, you build a model in which media bias emerges because firms slant their coverage toward their audience to build a reputation for quality. I’m curious to know how that holds up empirically
I’d also like to ask about your findings on the role of newspaper owners in driving media slant, and what that implies for competition policy for media.
Gentzkow: ...One of the things we found in looking at newspapers is that their political slant or political content seems to be driven very strongly by demand from their readers, the fact that people in conservative places want to hear conservative stuff and the converse for liberals. And that slant is basically uncorrelated with anything about their owners, the ownership of the paper.
So if you look at two newspapers that are owned by the same company, or the same individual, they are no more similar to each other than two unconnected newspapers in those same places. For instance, the New York Times Company at one time owned a bunch of newspapers all over the country. Those newspapers did not all look like the New York Times; they looked like other newspapers in the places where they were located.
That speaks directly to regulation because much of the way we regulate media is by regulating media ownership. The premise of a lot of that regulation has explicitly been that having diverse viewpoints, diverse ideas and independent reporting is important for democracy. And that in order to guarantee, we need to have diverse ownership because owners are going to put their own imprint on the content of their media.
Region: The concern that if Rupert Murdoch, for instance, or William Hearst in an earlier era, controls newspapers, radio, et cetera, he’ll use that platform to push his political agenda.
Gentzkow: Right, if Murdoch takes over everything, we’re not going to like it because everything will look like Fox News.
Our research results push back on that and say that, at least in this particular context, ownership is not really the key driver of slant and, in fact, a lot of the driver is actually coming from consumer demand. Not only does that say that you might not need to be as worried about ownership, but it also says that the welfare implications of this are a little more complicated because now consumers are getting what they want.
We might think from a political, democratic point of view that it would be better if the public got different, more diverse information. But there’s going to be a welfare trade-off because we would be giving them content they would prefer less. If we want to give people diverse content that we think is good for democracy, then we have to get them to actually read, watch or consume it. And, you know, giving a bunch of people in conservative places some liberal newspaper—well, our results would suggest they’re not going to read it. So, that seems to have important implications for policy.
But it comes with a really important caveat. The finding that ownership doesn’t matter in terms of a newspaper’s political slant is not a universal result. It doesn’t apply everywhere. It’s a statement about newspaper markets in the United States—a highly commercialized, relatively competitive setting, and a place where the political returns to manipulating the average content of a newspaper might not be all that big.
It could be entirely consistent with those results that in other countries, in other contexts, it may well differ. Does Silvio Berlusconi influence the media in Italy? A lot of evidence suggests yes. Does control by the government of Russia affect the content of the media in Russia? Or even if we were to look at national cable outlets in the U.S., would we be confident that ownership doesn’t matter? I think that’s a pretty big leap; you need to be careful.
My own view would be that, probably more than is often assumed, the fact that Fox News has conservative content in the U.S. is related more to the fact that that’s a very profitable business strategy than to any personal political agenda of Rupert Murdoch. But our results don’t settle that question, and it’s an important question.
People in different places and different backgrounds can have such persistently different beliefs about even factual issues, beliefs that never seem to converge. How do people end up with such different beliefs? Why don’t they converge? The sharp empirical test that’s going to pin [this] down—that, I think, we’re still looking for.
Region: And your earlier paper with Shapiro in which you developed a model about newspapers and political slant: Could you tell us a bit about it and how it fares empirically?
Gentzkow: The theory paper that Jesse and I wrote makes the point that, first of all, there’s a mechanism by which even rational consumers, even consumers who really care about getting the truth, are nevertheless going to demand news in a way that matches what we see empirically. That is, they’re going to demand news that matches their own ideology.
Why is that true? Well, suppose you live in a world where you don’t know ahead of time which sources have accurate information and can be trusted, and which don’t have accurate information and can’t be trusted. In that world, a correct, rational, Bayesian inference is that if you say a bunch of stuff that I think a priori is incredibly unlikely to be true, I’m going to trust you less. And if you say stuff that sounds to me like it’s probably right, that is consistent with my prior beliefs about what’s most likely to be true, I’ll trust you more.
It’s obvious in the extremes. If we go into a supermarket and see a tabloid newspaper reporting that Elvis Presley was spotted in New York or that aliens came down from outer space, and you have a strong prior belief that that’s not true, then even if we’ve never seen that newspaper before, we’ll infer that it’s probably not a very accurate newspaper. It’s a totally reasonable judgment that nobody would take issue with.
That same kind of judgment leads to things such as, if I’m somebody who believes very strongly that global warming is a hoax or that the evidence for it is weak, and a lot of people I’ve talked to believe that global warming has been exaggerated, then if I see news outlets that are arguing otherwise, I’m going to trust them less. And if I see news outlets that are skeptical about global warming, I’m going to trust them more.
You can see that playing out on lots and lots of political issues. So, on net, if I’m conservative, I will sincerely believe that Fox News is a more trustworthy source of information. I’m not simply watching Fox News because, “Well, I know that it’s distorted, but it makes me feel better.” That is, I’m not watching it because it confirms my biases and makes me feel good by telling me that I’m right even though I sort of know that it’s less accurate. Rather, I’m watching it because I genuinely think it’s the most accurate source of information there is.
So, that’s what’s true in the world of that model but, as you asked, does that match the facts? Has that been confirmed? I think it resonates very strongly with my casual, anecdotal impression of how people feel about the media choices they make, and it resonates with a lot of survey evidence.
Surveys show that people who, for instance, happen to be liberal and are also consistent readers of the New York Times (including many of our friends in academia) sincerely believe that the New York Times is a trustworthy and accurate newspaper. True, it happens to agree with their political point of view, but if you ask them to bet on a factual question, they would put money on the New York Times being accurate. And surveys also show that people who are conservatives believe exactly the same thing about Fox News.
But that’s all anecdotal, survey-type evidence. We haven’t figured out a way to confirm it empirically, so it remains kind of an open question. We need sharper empirical tests that separate how much of the demand for like-minded information comes from this kind of mechanism versus a variety of other psychological mechanisms that we know are operating.
For example, there’s good evidence that we remember things better when they’re consistent with our prior point of view. There is also a sense of enjoyment at hearing confirmatory information. It’s really fun if you’re a conservative, for instance, to listen to Rush Limbaugh, and it’s really fun if you’re a liberal to listen to Jon Stewart or the “Daily Show”—people making fun of the people you disagree with is really enjoyable. So, there’s definitely that element; the pleasure of hearing somebody reinforce your beliefs is a very real thing.
That tendency of people to seek out like-minded information is so pervasive. You see it in absolutely every context that anyone has ever looked at; you see it for well-educated people and those who are far less-educated. You see it when the stakes are low as well as when they’re high. You see it everywhere and all the time. And some big component of that fact that it’s so robust and pervasive is related to this underlying fact that it’s also rationally what you would do if you were genuinely trying to figure out what is true.
There’s a broader question that is part of what first got me interested in all of this, which is, how is it that people in different places and different backgrounds can have such persistently different beliefs about even factual issues, beliefs that never seem to converge.
We’ve talked about liberals and conservatives in the U.S., but there are also huge differences across countries. Jesse and I looked at some Gallup data where following 9/11, 75 percent of people across nine Islamic countries believed that the World Trade Center was not destroyed by an airplane—that was hijacked by Arab terrorists. They had a variety of other explanations: The CIA did it, Mossad did it or something else. In stark contrast, basically 100 percent of people in the U.S would agree that 9/11 was a terrorist attack.
How do people end up with such different beliefs? Why don’t they converge? Is it all because people are deceiving themselves, or they’re biased, or they want to be told that they’re right? Maybe that’s part of it, but at the root of it, I think, is that figuring out who you can trust is a really, really hard thing. We all start out surrounded by information coming from all these different sources—from our friends, our parents, different media outlets, from the government. We need some point of reference to judge who we’re going to listen to.
So it seems obvious—if you’re sitting in America—that, “Well, of course, the World Trade Center was destroyed by terrorists. Every single news organization that we’ve ever seen agrees with that; every single expert we’ve ever heard from agrees with that.”
But if you’re sitting in Pakistan, it’s not crazy to say, “Well, those are all Western news organizations, they share the same bias, they’re part of the same conspiracy, they’re controlled by the same people. Telling me that a hundred of them say this or that isn’t so different from telling me that one of them says it. And I’ve heard from a bunch of other people and seen some videos on YouTube. There’s actually a lot of evidence on the other side, and so I’m going to make a different judgment.”
So that core question of trust has seemed to me for a long time to be really important, but the sharp empirical test that’s going to pin down how much is due to a particular thing— that, I think, we’re still looking for. ...

    Posted by on Wednesday, May 25, 2016 at 12:15 AM in Economics, Media | Permalink  Comments (27)


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