Starving The Watchdog: Who Foots The Bill When Newspapers Disappear?


With no shortage of free information on the internet, millions of Americans have decided they don't need to shell out for a subscription to their local newspaper. But new research suggests this collective decision may have costs in the long run. In an episode of the NPR podcast “The Hidden Brain,” Shankar Vendantam, Rhaina Cohen and Tara Boyle cover new research that looks at the long-term effect of treating newspapers like dispensable consumer products. The study found that after a newspaper closes, municipal borrowing costs increase by 5 to 11 basis points, costing the municipality an additional $650,000 per issue. “This effect is causal and not driven by underlying economic conditions,” the researchers wrote. “The loss of government monitoring resulting from a [newspaper] closure is associated with higher government wages and deficits, and increased likelihoods of costly advance refundings and negotiated sales. Overall, our results indicate that local newspapers hold their governments accountable, keeping municipal borrowing costs low and ultimately saving local taxpayers money.”

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Transcript of podcast on Hefty Pricetag for Residents