The Impact of Newspapers on Consumer Confidence: Does Spin Bias Exist?
AbstractMullainathan and Shleifer (2002) 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, reflects the outlet's attempt to simply create a memorable story. Competition between outlets can eliminate the effect of ideologicalbias, but increases the incentive to spin stories. We examine whether spin exists in Dutch newspaper reporting on the state of the economy. If so, we assume that in their reports on the state of the economy newspapers exaggerate. Consumers reading such reports may be influenced by these reports. As a result, consumer confidence may be affected not only by economic fundamentals, but also by the way they 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, but small, impact on consumer confidence, which is short- lived.
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Bibliographic InfoPaper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 011.
Date of creation: Oct 2004
Date of revision:
Other versions of this item:
- Karel Jan Alsem & Steven Brakman & Lex Hoogduin & Gerard Kuper, 2008. "The impact of newspapers on consumer confidence: does spin bias exist?," Applied Economics, Taylor & Francis Journals, vol. 40(5), pages 531-539.
- 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.
- 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 1328, CESifo Group Munich.
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
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