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You get what you want: A note on the economics of bad news

Author

Listed:
  • McCluskey, Jill J.
  • Swinnen, Johan
  • Vandemoortele, Thijs

Abstract

We develop a simple theoretical model that explains the slant towards negative coverage in news media. In a framework where news is informative and consumers are risk averse, diminishing marginal utility implies that information about a negative income shock is more valuable than information about a positive shock, which leads to disproportionate reporting of bad news.

Suggested Citation

  • McCluskey, Jill J. & Swinnen, Johan & Vandemoortele, Thijs, 2015. "You get what you want: A note on the economics of bad news," Information Economics and Policy, Elsevier, vol. 30(C), pages 1-5.
    • Handle: RePEc:eee:iepoli:v:30:y:2015:i:c:p:1-5
    DOI: 10.1016/j.infoecopol.2014.10.003
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    References listed on IDEAS

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    Cited by:

    1. Stephen Morse, 2018. "Focussing on the Extremes of Good and Bad: Media Reporting of Countries Ranked Via Index-Based League Tables," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(2), pages 631-652, September.
    2. Heinz, Matthias & Swinnen, Johan, 2015. "Media slant in economic news: A factor 20," Economics Letters, Elsevier, vol. 132(C), pages 18-20.
    3. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    4. Ivana Lolic & Petar Soric & Mirjana Cizmesija, 2017. "Disentangling the Relationship between News Media and Consumers' Inflation Sentiment: the Case of Croatia," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(3), pages 221-249, June.
    5. Tongzhe Li & Kent D. Messer & Alisher Mamadzhanov & Jill J. McCluskey, 2020. "Preferences for local food: Tourists versus local residents," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(4), pages 429-444, December.
    6. Eleni A. Galata, 2017. "The cultivation of opinions. How did the press cover the last 16 years of experience with GMOs in Canada?," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1297212-129, January.
    7. Ricci, Elena Claire & Banterle, Alessandro, 2020. "Do major climate change-related public events have an impact on consumer choices?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).

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    More about this item

    Keywords

    Media; Bias; Slant; Negative news coverage;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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