ome from larger fund families, and have higher returns and inflows over the prior 12 months than their peers. They are less likely to charge investors a sales commission(load), but their expense ratios are roughly comparable. Relative to the actual distribution of mutual funds across investment objectives, mentions in the publications we study focus disproportionately on general domestic equity funds Funds receiving positive mentions belong to families that spend a greater percentage of family assets on both print and non-print advertising and, since these families are larger, spend much more than average in absolute terms. Interestingly, the sample of funds recommended by Consumer Reports also come from families that spend an above-average amount on advertising. This suggests that advertising may be corre- lated with characteristics that are unobservable to the econometrician but that the financial media uses to rank funds. Consequently, our tests for advertising bias control for fund families'general level of advertis- ing. Examining the share of print advertising by publication reveals that funds receiving mentions from a oublication tend to come from families with higher than average levels of advertising in that publication II. Does Advertising Influence the Media? A. Motivation and Empirical Framework To motivate our tests for advertising bias, consider the mutual funds that appear on Money magazine's annual Money 100 list during our sample period. In an average year, 83.8 percent of families that spent more than $I million on advertising in Money over the prior 12 months are mentioned on the Money 100 list at least once. In contrast, only 7.2 percent of families that did not advertise in Money over the prior 12 months are mentioned. This difference partially reflects the fact that heavy advertisers tend to manage more mutual funds than non-advertisers. However, an individual fund from a heavy advertiser is more than twice as likely to be included on the Money 100 list as an individual fund from a non-advertiser ( 3.0 percent versus 1.3 percent). This difference is consistent with pro-advertiser bias, but obviously does not control for any of the mutual fund or mutual fund family characteristics that might lead publications to rank one mutual fund over another. In particular, one might worry that"high quality"'mutual funds are both more likely to advertise and more likely to receive positive media mentions [Milgrom and Roberts, 1986. To address this concern, we turn to multivariate tests for advertising biascome from larger fund families, and have higher returns and inflows over the prior 12 months than their peers. They are less likely to charge investors a sales commission (load), but their expense ratios are roughly comparable. Relative to the actual distribution of mutual funds across investment objectives, mentions in the publications we study focus disproportionately on general domestic equity funds. Funds receiving positive mentions belong to families that spend a greater percentage of family assets on both print and non-print advertising and, since these families are larger, spend much more than average in absolute terms. Interestingly, the sample of funds recommended by Consumer Reports also come from families that spend an above-average amount on advertising. This suggests that advertising may be corre￾lated with characteristics that are unobservable to the econometrician but that the financial media uses to rank funds. Consequently, our tests for advertising bias control for fund families’ general level of advertis￾ing. Examining the share of print advertising by publication reveals that funds receiving mentions from a publication tend to come from families with higher than average levels of advertising in that publication. III. Does Advertising Influence the Media? A. Motivation and Empirical Framework To motivate our tests for advertising bias, consider the mutual funds that appear on Money magazine’s annual Money 100 list during our sample period. In an average year, 83.8 percent of families that spent more than $1 million on advertising in Money over the prior 12 months are mentioned on the Money 100 list at least once. In contrast, only 7.2 percent of families that did not advertise in Money over the prior 12 months are mentioned. This difference partially reflects the fact that heavy advertisers tend to manage more mutual funds than non-advertisers. However, an individual fund from a heavy advertiser is more than twice as likely to be included on the Money 100 list as an individual fund from a non-advertiser (3.0 percent versus 1.3 percent). This difference is consistent with pro-advertiser bias, but obviously does not control for any of the mutual fund or mutual fund family characteristics that might lead publications to rank one mutual fund over another. In particular, one might worry that “high quality” mutual funds are both more likely to advertise and more likely to receive positive media mentions [Milgrom and Roberts, 1986]. To address this concern, we turn to multivariate tests for advertising bias. 5