Magazine Subscription and Intertemporal Discounting: Some Further Evidence

The paper assesses price discrimination in magazine subscriptions in the Brazilian market using an integrated approach that considers also revenues from advertising. According to Oster and Scott-Morton (2005) long-term benefits of reading should play a major role in reducing the need for discount on subscription offers. However, evidences, in a market where subscription is much less widespread, does not provide support for that form of price discrimination after controlling for different characteristics of the magazines in the econometric analysis. In particular, the consideration of the subscription horizon did not exert any significant effect on the subscription discount. Nevertheless, an exploratory analysis based on principal components suggests that a multidimensional price discrimination mechanism that is composed of price and advertising discounts may be occurring. The interconnection between different forms of price discrimination was further reinforced in the regression analysis as indicated by the important role of advertising price discrimination on subscription-related price discrimination.