Does advertising subsidize magazine prices? : a case study in Thailand

The purpose of this study is to determine whether advertising subsidies prices of small-circulation magazines in Thailand. Replicating Norris' (14) methodology, regression analysis was used to determine the relationships between the dependent variables of cover price and cover price per editorial page and independent variables of percent of advertising pages per total pages, circulation and number of editorial pages. The results may be summarized as follows; 1) The price consumers in Thailand pay either per cover price or per page of editorial content is directly related to advertising: thus, advertising does not appear to subsidize the magazine's price; 2) Circulation bears an inverse relationship with both cover price and cover price per editorial page. Thus, the higher the circulation, the less costly the magazine; 3) The number of editorial pages is positively related to cover price and negatively related to cover price per editorial page. Thus the more paper per magazine, the higher the cover price and the lower the cover price per page. Surprisingly, the results are conceptually consistent with the studies conducted in the United States. The differences in industry structure, such as circulation size, do not result in a different conclusion. Therefore, advertising in Thailand, as in the United States, does not subsidize magazine prices.