Doug Campbell

English

Research Papers in Economics

I
n 2003, the W ashington Post won three Pulitzer Prizes,
more than any other newspaper in the nation save for the
Los Angeles Times, which also collected three. For the
reporters and photographers whose names were on the win-
ning entries, the significance cannot be overstated: Pulitzers
are journalism’s highest honor. The winners can expect greater
pay and prestige — and almost certain career advancement.
The payoff for the Post as an institution isn’t bad, either.
Pulitzers may be a big part of the reason why the Post sells so
many papers — more than 1 million on Sundays to be exact,
the fifth highest total in the country.
In  their recent article, “Newspaper Quality, Pulitzer
Prizes, and Newspaper Circulation,” University of
Oklahoma economists Brian Logan and Daniel Sutter test
whether good journalism is also good business. Their study
shows that U.S. consumers have a healthy appetite for 
“quality” journalism. In newspapers, the authors conclude,
quality still sells.
Journalism became an in-
creasingly ripe topic for eco-
nomic inquiry in the 1980s and
1990s as media companies con-
solidated their empires. There
were worries that profits would
come before quality. Sociologists
David Crouteau of Virginia
Commonwealth University and
William Hoynes of Vassar
College wrote that there was
increased “emphasis on revenue,
margins, profits, and stock-price
performance, forcing the companies to emphasize the
aspects of newspaper operation that directly produce those
results.” Profit-maximizing media companies, the watch-
dogs warned, would seek to trim staff and deliver advertiser-
friendly news — not the sort of “quality” attributes tradi-
tionally associated with the noble Fourth Estate.
Sutter has looked at journalism through an economic lens
before. In a 2001 paper published in the Cato Journal, he
addressed the conventional wisdom that the news media as a
whole tilts left. While he concedes that there is good evidence
to support that claim — in surveys, a large majority of journal-
ists at top media outlets identify as being left of center — it’s
not clear that such bias is sustainable. That would require a 
cartel — and cartels are notoriously unstable, with defection a
constant threat. In the case of the media, new technologies are
lowering the cost of entry, making it even easier for conserva-
tive voices to be heard. Over time, well-functioning markets
should provide a wide variety of choices for media consumers.  
In their new study, Logan and Sutter also look to the mar-
ketplace, this time for quantifiable answers about the appeal
of quality journalism. They chose Pulitzers as their gauge on
the premise that the prizes bridge the gap between con-
sumers’ and journalists’ perceptions of quality. They write:
“Pulitzer Prizes are a measure of quality as judged by jour-
nalists which consumers can easily observe and thus, provide
an opportunity to determine whether news consumers value
what journalists consider high-quality journalism.”
The results are compelling. Logan and Sutter examined
daily and Sunday circulation of the nation’s largest 400 news-
papers in 1997. They found that papers which had won
Pulitzers during the preceding decade had “significantly high-
er circulation, even when controlling for the economic and
demographic characteristics and media competition of the
metropolitan areas.” In fact, daily circulation was found to be
55 percent higher for Pulitzer winners than their empty-hand-
ed counterparts. The top win-
ners in the years from 1987 to
1997 were among the 10 largest
in U.S. daily circulation: the
New York Times with 18 prizes,
the W ashington Post with 14, and
the Philadelphia Inquirerwith 11.
Af ew  holes remain. In
claiming that the biggest are
also the best, the authors 
don’t explain the anomaly of
USAT oday, whose unparal-
leled growth has made it the
nation’s largest paper with 
circulation of more than 2.2 million. At the same time, 
USAT oday’s  record in winning Pulitzers has been paltry,
with just one in its entire history. And as Logan and Sutter
note, USAT oday is regularly derided in journalism circles 
as “McPaper.” Nor do the authors address broader circula-
tion trends, in which even prize-winning newspapers are
losing eyeballs to cable TVand the Internet, which are not
always bound by the same standards as print journalism.
Still, Logan and Sutter make a strong case that publish-
ing good newspapers is good business. Papers that provide
quality content usually attract wider audiences, which
means greater revenue. More revenues don’t necessarily
mean more profitability, but it’s a fine start. “Quality may
well  pay,” they conclude. “If quality produces a larger 
audience, owners of media companies can rationally invest
in quality journalism.” In a country that depends upon the
free flow of quality information for the proper functioning
of its government and economy, that’s good news. RF
RESEARCHSPOTLIGHT
Is Good Journalism Good Business?
BY DOUG CAMPBELL
Winter 2005 • Region Focus 7
“Newspaper Quality, Pulitzer
Prizes, and Newspaper Circulation” 
by Brian Logan and Daniel Sutter.
Atlantic Economic Journal, 
June 2004, vol. 32, no. 2, pp. 100-112.
RF Winter 04 FINAL.ps - 1/10/2005 13:56 PM

Research spotlight : Is good journalism good business?

http://www.richmondfed.org/publications/research/region_focus/2005/winter/pdf/research_spotlight.pdf

Research spotlight : Is good journalism good business?

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