The impact of newspapers on consumer confidence: does spin bias exist?

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The impact of newspapers on consumer confidence: does spin bias exist?

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Karel Jan Alsem
Steven Brakman
Lex Hoogduin
Gerard Kuper

Additional information is available for the following registered author(s):

Gerard H. Kuper

Abstract

It is sometimes argued that news reports in the media suffer from biased reporting. Mullainathan and Shleifer (2002, 2005) argue that there are two types of media bias. One bias, called ideology, reflects a news outlet's desire to affect reader opinions in a particular direction. The second bias, referred to as 'spin' or 'slanting', reflects the outlet's attempt to simply create a memorable story. Competition between outlets can eliminate the effect of ideological bias, but increases the incentive to spin or slant stories. We examine whether we find some evidence of spin in Dutch newspaper reporting on the state of the economy. If newspapers are indeed able to create memorable stories this should, according to our hypothesis, affect the opinion of readers with respect to the state of the economy. Sentiments about the actual state of the economy could be magnified by spin. As a result, consumer confidence-a variable that routinely measures the opinion on the state of the economy-can be expected to be affected not only by economic fundamentals, but also by the way these fundamentals are reported. We construct a variable that reflects the way consumers perceive economic news reported in newspapers. We find that this variable indeed has a significant impact on consumer confidence, which is short-lived.

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Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 40 (2008)
Issue (Month): 5 ()
Pages: 531-539
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Handle: RePEc:taf:applec:v:40:y:2008:i:5:p:531-539

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Paper
- Karel-Jan Alsem & Steven Brakman & Lex Hoogduin & Gerard Kuper, 2004. "The Impact of Newspapers on Consumer Confidence: Does Spin Bias Exist?," DNB Working Papers 011, Netherlands Central Bank, Research Department. [Downloadable!]
- Karel-Jan Alsem & Steven Brakman & Lex Hoogduin & Gerard Kuper, 2004. "The Impact of Newspapers on Consumer Confidence: Does Spin Bias Exist?," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
- Alsem, Karel-Jan & Brakman, Steven & Hoogduin, Lex & Kuper, Gerard, 2004. "The impact of newspapers on consumer confidence: does spin bias exist?," CCSO Working Papers 200410, University of Groningen, CCSO Centre for Economic Research. [Downloadable!]

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Sydney C. Ludvigson, 2004. "Consumer Confidence and Consumer Spending," Journal of Economic Perspectives, American Economic Association, vol. 18(2), pages 29-50, Spring. [Downloadable!] (restricted)
Sendhil Mullainathan & Andrei Shleifer, 2002. "Media Bias," NBER Working Papers 9295, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Sendhil Mullainathan & Andrei Shleifer, 2002. "Media Bias," Harvard Institute of Economic Research Working Papers 1981, Harvard - Institute of Economic Research. [Downloadable!]
Jansen, W. Jos & Nahuis, Niek J., 2003. "The stock market and consumer confidence: European evidence," Economics Letters, Elsevier, vol. 79(1), pages 89-98, April. [Downloadable!] (restricted)
Other versions:
- W. Jos Jansen & Niek J. Nahuis, 2002. "The Stock Market and Consumer Confidence: European Evidence," MEB Series (discontinued) 2002-11, Netherlands Central Bank, Monetary and Economic Policy Department. [Downloadable!]

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