One of the points that was raised by both Fairfax and News Corp at the ANF conference was that a price rise for newspapers was imminent. This I think was quite surprising to most of us at the conference.
I decided to do some checking to see what has been the effect in the past of price rises on newspapers. Since most home deliveries are now on subscription and the price to the newsagent depends on policy, I decided just to check counter sales.
So I picked a newsagent who is in a shopping centre, reasonably large who does not do deliveries.
Here is the table.
Note the average price of newspapers has been going up slowly over time, although less than the inflation rate.
I then used a modelling program, ran the figure though over 25 billion formulas and came up with a result that a small increase in the price of newspapers would have little if any drop in sales.
These results support the view that newspapers should go up and it should have little if any impact on sales as long as the increase is in line with inflation.
For those who like mathematics, this is the formula I produced.
Sales = 21944.242 + 1344.8744/(43.759869 - 26.042509*A) + 371.74988*cos(2654506*P) - 1632.4492*cos(1923890.3 - 1316.9055/(43.905983 - 26.187922*A)) - 514.16138*P with a good fit of .006
