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Paper acts as a vapor barrier.Inside your home vapors come from cooking,showers and even you.There are two schools of thought on this subject.In a new home walls have plastic or paper(plastic being a tighter vapor barrier)Vapors will escape through poorly installed paperbacked insulation,causing problems at the dew point in your wall(THE PLACE WHERE COLD MEETS WARM)Vapors tend to rise.I personally think that while yyou need a vapor barrior on the ceilings,that is below your attic space,if you use paper backed insulation(no plastic on ceilings)that some vapors will escape into your vented attic not causing any problems.IF you don't let vapors escape this way,the vapors go to your windows,causing condensation,and wet wood,sills,etc. SO,the paper goes down toward your warm side.

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Q: When insulating the attic ceiling does the paper go down or up?
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