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ERIC Number: ED134991
Record Type: Non-Journal
Publication Date: 1976
Pages: 20
Abstractor: N/A
Circulation Price Elasticity in the Daily Newspaper Industry.
Grotta, Gerald L.; Taylor, Michael Lee
Pricing of subscriptions and single copies has historically been arbitrary. Evidence indicates that the newspaper industry has tended to overestimate the elasticity of demand for newspaper circulation. This study analyzed price changes, circulation changes, and population changes for all daily newspapers in the United States between 1970 and 1975. Results strongly supported the hypothesis that the demand curve is highly inelastic and that newspapers have been grossly undercharging for their product in relation to the market. The estimate of elasticity for all newspapers during the six-year period studied indicated that a 50% increase in price resulted in only a 1.25% decrease in circulation, with percentage change in population of the publishing city or metropolitan area held constant. Projected potential loss to the newspaper industry because of past reluctance to raise per-copy price from 10 to 15 cents is estimated at more than one billion dollars a year. There appears to be no evidence that daily newspapers have yet approached the point of diminishing returns from price increases to the audience consumers of the industry. (Author)
Publication Type: Speeches/Meeting Papers
Education Level: N/A
Audience: N/A
Language: N/A
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A