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Consumers Respond More to Negative News than Positive Info

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  • Antonella Tutino

Abstract

Consumers, forced to navigate a constant stream of economic information, are often challenged to sort through details and respond to new material. Experiments suggest that people react more forcefully to negative income shocks than to positive ones. Size also matters: Reaction to small shocks is slower relative to the response to big shocks participation-rate decline.

Suggested Citation

  • Antonella Tutino, 2018. "Consumers Respond More to Negative News than Positive Info," Economic Letter, Federal Reserve Bank of Dallas, vol. 13(7), pages 1-4, May.
    • Handle: RePEc:fip:feddel:00062
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