Q&A: James Hamilton, Director of Stanford University’s Journalism Program
This week, The Idea caught up with James Hamilton, the director of the journalism program at Stanford.
Can you tell me about yourself, your background, and how you became interested in news markets?
I have a PhD in economics, and in the first ten years of my career I focused on how information affects polluter behaviors. I studied an EPA program called the Toxic Release Inventory, where the EPA each year releases data on what comes out of smokestacks and goes into rivers. I had read that there was a proposal to have a violent television report card that would report who was advertising on violent television programs. That caused me to see TV violence as a pollution problem, one of negative spillovers on society that are unintended.
I ended up writing a book called, Channeling Violence: The Economic Market for Television Violence, which took the theories of environmental policy and applied them to the market for TV violence. That experience caused me to be interviewed by a lot of journalists who were critical of the media and TV violence, and I felt there was another story to be told about stories that aren’t produced in the market, but do have a positive impact on society, namely, public affairs reporting. That led me to write a book called All The News That’s Fit to Sell.
What was the thesis of All The News That’s Fit to Sell? What were some of your findings about the positive spillovers of public affairs reporting?
We generally think of journalism as the five W’s: who, what, when, where, and why. In All The News, I argue that there are a set of five economic W’s that determine what stories get told and what media organizations survive in the marketplace. Those five economic W’s are: who cares about a particular piece of information, what are people willing to pay for that or what are people willing to pay for the attention of those readers, where else can you find these consumers, when is this profitable (that brings in the cost structure of creating information), and why is this profitable (that brings in the property rights to information.)
Journalists don’t roll out of bed every day and say, “it’s a great day to maximize profits,” but those five sets of economic W’s do determine whose stories get told and why. In All The News That’s Fit to Sell, I try to lay out some economic concepts that explain markets for news, and in particular I draw on Anthony Downs. He said, we all have four information demands in our life as a consumer, as a worker, or as an entertainment audience member, or as a voter. The first three markets work fairly well, because if you don’t seek out the information, you don’t get the benefit. But in the voter demand, the problem there is that even if you care passionately about an issue and more information would help you make a better decision, the probability that your vote determines the outcome of an election — unless you’re Justice Scalia — is very tiny. As a result, Anthony Downs says most people remain rationally ignorant about the details of politics.
I do think that there is a market for public affairs information. I think of it as duty, diversion and drama. Some people think that they have a duty to vote and a duty to become informed. For some people, the details of politics and policy are as interesting as ESPN. That’s a very tiny part of the market, that’s the 1% that turns out to watch PBS NewsHour. For drama, you bring back the entertainment demand by describing politics as a horse race or a scandal.
I think on the demand side, this notion of rational ignorance helps explain why there is a gap between what people need to know as citizens and what they want to know as consumers. The other major problem with public affairs markets you can think of as the following: Suppose you do an investigative report. You change lives and laws, but those benefits go onto many people who are not your readers or viewers. Economists call those positive spillovers or positive externalities. It means it’s hard to capture the social benefits of what you’re doing. That means those stories are under-provided in the marketplace.
When you’re sizing for demand for news, are you mostly thinking about consumer demand or are you also thinking about different stakeholders like foundations or advertisers?
Pew has done work that shows that the number of journalists in Washington, DC, has stayed relatively the same, but the type of journalist has changed. Ten years ago you might have had bureaus from strong regional or local newspapers. Now, what you see is more people writing for newsletters for targeted niche publications, for people or readers whose business is the business of government. That’s what Anthony Downs meant when he said if you have a producer demand for information, if it helps you do your job better, you’re more likely to seek out that information. You see a lot of targeted information in DC, bought by people who are lobbyists and congressional staffers.
Out on the West Coast, the version of that would be The Information, where people subscribe to that because they’re very interested in the tech industry and they have a producer demand. They make money if they read that type of outlet.
Can you talk about your research on news markets’ failures when it comes to reaching low income individuals?
We’ve been talking about the demand for information, but let’s think about the supply side for information. There are really five incentives that lead to the creation of information. One is “pay me.” That’s the subscription model. One is “I want to sell your attention,” that’s advertising. One is “I’d like to change how you think about the world,” that’s nonprofit. One is “I’d like your vote,” that’s partisan, and one is “I just like to talk,” that’s self expression and a lot of social media.
If you think about each of those five incentives, they all have a bias, and that bias is particularly problematic for low income individuals. They have a lower willingness to pay for news, because there are so many other things they need to spend their limited resources on. They are less likely to be targeted by advertisers, except for particular things that might be subject to misrepresentation or fraud, like for-profit colleges or pay-day loans. There’s some evidence that if they’re voting at lower rates, they aren’t going to be targeted on the Internet for voter turnout if you don’t think they’re going to vote. They are less likely to be donors particularly to news outlets, and they’re less likely to be connected with broadband Internet, which affects whose voices get magnified on social media. I’m really interested in what we can learn about the information lives of low income individuals. Can we get people to start thinking about ways to improve that ecosystem?
Do you have any solutions to that question yet?
I wrote an essay with Fiona Morgan, and we looked at three things: bundling, big data and behavioral economics. Bundling: suppose you think about where low income people may be seeking out information. You can think about it in terms of government benefits. Is there a way that we can reach people in physical space when they’re applying for one set of government benefits and give them information on the bundle of government benefits that are available?
Behavioral economics is an area that’s researching how you can nudge people, provide them with information, so if people are filling out information at a tax preparer for an earned income tax credit, suppose you also gave them information on applying for college loans. There’s great work for Caroline Hoxby at Stanford, showing how if you send information to low income students who have scored very highly on standardized tests, and you give them information on the net costs of college after financial aid, that can actually change their decisions about where they apply.
With big data, we’re trying to figure out what we can learn about the decisions people are making and the ways that you might reach them or target them. Caroline Hoxby’s examples of finding students with low incomes and high test scores and giving them information would be an example of that.
How does your work at the Computational Journalism Lab at Stanford relate to your broader research?
The theme of the journalism program at Stanford is that accountability journalism is important and under-provided in society. What can we do about it here? We’ve identified two research questions: How can you lower the costs of discovering stories with better use of data and algorithms, that’s the supply-side approach. And how do you tell stories in a more personalized or engaging way? That’s the demand side. If you’re telling stories that are easily available on the Internet elsewhere, you can’t charge for it. That product differentiation is important.
In terms of story discovery costs, we have a project led by Cheryl Phillips called Big Local News, and the idea there is, can we take data, localize it through a reporting recipe, and share that out in a way that stimulates local reporters to write stories. That evolved from something called the Stanford Open Policing Project, where our students did Freedom of Information Act requests at all 50 states. They got back more than 130 million records on state police stops. Cheryl Phillips worked with Sharad Goel in the engineering school at Stanford, developed new algorithms to look at police bias in traffic stops, and they trained more than 100 reporters at places like NICAR or IRE. If you look at that data, that data has been used by local TV stations, local newspapers, the Marshall Project, NBC News, National Geographic, The Economist. The idea is, can universities do R&D and then share it back with journalists in a way that makes it easier for them to write stories?
What’s the most interesting thing you’ve seen in media from an organization other than your own?
One thing that I really admire is ProPublica’s machine bias. They were trying to discover how Facebook’s advertising algorithms work, and people often say, that’s a black box, how could you determine that? They took a simple approach. They actually took out ads and saw what type of ads Facebook was willing to accept. I liked that because it was a very low tech solution to the study of high tech.
