What Drives Demand for Government-Controlled News in Russia?∗ Andrey Simonov Justin Rao Columbia University HomeAway, Inc. 8th February 2018 News consumers in many authoritarian countries read government-controlled sources even when independent sources are available. What drives this demand for government-controlled news? We separate out two potential sources of such demand, preferences for pro-government coverage of sen- sitive events and persistent preferences for news outlets. Identification strategy relies on exogenous shifts in the volume of sensitive events over time. Demand estimates in the Russian online news market reveal that an average consumer has a distaste for pro-government ideology but strong persistent preferences for state-owned outlets. The state-owned outlets would have 20.3% higher market share without the pro-government bias in their reporting. ∗Simonov (corresponding author):
[email protected]; Rao:
[email protected]. Andrey is grateful to his advisors and dissertation committee members Pradeep Chintagunta, Jean-Pierre Dub´e, Matthew Gentzkow and G¨unter Hitsch for their guidance and support. We thank Charles Angelucci, Ruben Enikolopov, Matt Goldman, Elisabeth Honka, Sanjog Misra, Chris Nosko, Miklos Sarvary, Bradley Shapiro, Raluca Ursu, Ali Yurukoglu, participants of the 16th Trans-Atlantic Doctoral Conference, 2016 AMA-Sheth Doctoral Consortium, 2016 Economics of Media and Communications Conference, 2017 Marketing Science Conference and the 15th Media Economics Workshop, seminar participants at the University of Chicago, Stigler Center at Chicago Booth, HKUST, University of Minnesota, University of Rochester, UCSD, Duke, LBS, Columbia, Southern Methodist University, Berkeley, Stanford, CMU, UCLA and University of Southern California for advice and suggestions. All opinions represent our own and not those of our current or past employers.