This chapter is helpful in understanding of what are the causes of a change in demand/supply and how markets work. I think the concept of elasticity of demand is interesting and has some applications to media economics because it depends on the nature of goods.
We may raise questions regarding media products such as how the concept of elasticity of demand works when it comes to new media (e.g., online news media or other online services like blogs); and further, is media we are using normal good or inferior good? Dr. Chyi (forthcoming?) proposes a question, “is online news an inferior good?” and contends that online news is an inferior good based on a theoretical framework (normal vs. inferior goods) that “when income increases, the demand for an inferior good decreases; when income decreases, the demand for an inferior good increases, other things being equal”. It seems interesting that hypothesis was supported even after controlling for other media use (newspaper, television news, and radio news). Regarding this study, I’d like to talk more about why online news is an inferior good; what about other newly emerging media; and other possibilities regarding this.
As of other possibilities affecting the result that online news is an inferior good, we might think characteristics of market. In other words, whether online news is an inferior good or not may depend on the nature of markets. For example, to what extent people consume online news may differ in geographic characteristics of market (e.g., distance or market segment) and systems of market (regulatory system).
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