Virginia Postrel on media bias

Virginia Postrel discusses an aspect of media bias in her current New York Times piece (registration required):

In a recent paper, "The Market for News," two Harvard economists look at that question. "There's plenty of competition" among news sources, Sendhil Mullainathan, one of the authors, said in an interview. But "the more competition there has been in the last 20 years, the more discussion there has been of bias."

The reason, he and his colleague, Andrei Shleifer, argue, is that consumers care about more than accuracy. "We assume that readers prefer to hear or read news that are more consistent with their beliefs," they write. Bias is not a bug but a feature.

In a competitive news market, they argue, producers can use bias to differentiate their products and stave off price competition. Bias increases consumer loyalty.

An interesting line of inquiry, although it doesn't apply as well to smaller media markets (like Canada), where concentration of media ownership is easier to achieve. Canadians can get coverage of world events from liberal to conservative US media, but Canadian media is much less well-distributed (the Sun chain of newspapers are the only major group with a conservative bias, while no television or radio network is a Canadian equivalent to Fox, for example).