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The Media's Role in Influencing Perceptions of Housing Values and the Resulting Impact on the Macroeconomy

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  • John McCollough
  • Komal Karani

Abstract

The housing market is a major component of the economy and persistent negative media reports can adversely affect perceptions and expectations of homeowners as to the value of their home. As a result, households reduce their expenditures and increase their savings in an effort to rebuild lost wealth. In the short run the economy suffers and the recession is magnified. This paper demonstrates, through an empirical study, how negative media reports regarding the deteriorating conditions of the national housing market affects what households feel their housing is worth.

Suggested Citation

  • John McCollough & Komal Karani, 2014. "The Media's Role in Influencing Perceptions of Housing Values and the Resulting Impact on the Macroeconomy," Economic Affairs, Wiley Blackwell, vol. 34(1), pages 68-77, February.
    • Handle: RePEc:bla:ecaffa:v:34:y:2014:i:1:p:68-77
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