The Hidden Costs of Losing Your City's Newspaper - Without watchdogs, government costs go up, according to new research
When local newspapers shut their doors, communities lose out. People and their stories can’t find coverage. Politicos take liberties when it’s nobody’s job to hold them accountable. What the public doesn’t know winds up hurting them. The city feels poorer, politically and culturally.
According to a new working paper, local news deserts lose out financially, too. Cities where newspapers closed up shop saw increases in government costs as a result of the lack of scrutiny over local deals, say researchers who tracked the decline of local news outlets between 1996 and 2015.
Paul Gao, an associate professor of finance at the University of Notre Dame and one of the paper’s authors, was inspired to look into the issue after an episode of “Last Week Tonight with John Oliver” about the news industry. “He was focused on two things: consolidation of national news media and closure of local news media. John Oliver’s show really gave us the prompt for the phenomenon, and we started thinking about it from an economist’s point of view.”
The survey covers some 1,596 English-language newspapers serving 1,266 counties in the U.S. over the study period.
Without investigative daily reporters around to call bullshit on city hall, three years after a newspaper closes, that city or county’s municipal bond offering yields increased on average by 5.5 basis points, while bond yields in the secondary market increased by 6.4 basis points — statistically significant effects.
The team presented its findings at the Society for Financial Studies Cavalcade at Yale University earlier in May, and it’s the subject of a discussion at the Brookings Institution in July. (The paper has yet to be published.)
And of course, not part of the study, but I'd also expect less or no fake news in a proper journalistic newspaper...
|The Hidden Costs of Losing Your City's Newspaper
Those vanishing civic watchdogs are worth every cent.