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Bias in Economic News: The Reporting of Nominal Exchange Rate Behavior in Colombia

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  • Rodrigo Taborda

Abstract

Since 1991, Colombia has had a market-determined Peso–US Dollar Nominal Exchange Rate (NER), after more than 20 years of controlled and multiple exchange rates. The behaviour (revaluation / devaluation) of the NER is constantly reported in the news, editorials, and op-eds of the major newspapers of the nation, with exceptional attention to revaluation. The uneven reporting of revaluation episodes can be explained by the existence of an interest group particularly affected by revaluation, looking to increase awareness and sympathy for help from public institutions. Using the number of news items and op-eds from a major Colombian newspaper, the over-reporting of revaluation episodes (in contrast to devaluation ones) is shown. Secondly, using statistical analysis of text upon the content of the news items, it is also shown that the words “devaluation” and “revaluation” are far apart in the distribution of words within the news; and the word “revaluation” is highly correlated with words related to: public institutions, exporters, and the need for assistance. Finally, the potential policy response to the media bias is explored.

Suggested Citation

  • Rodrigo Taborda, 2013. "Bias in Economic News: The Reporting of Nominal Exchange Rate Behavior in Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2013), pages 103-153, August.
    • Handle: RePEc:col:000425:010918
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    1. Dewenter, Ralf & Dulleck, Uwe & Thomas, Tobias, 2016. "Does the 4th estate deliver? Towards more direct measure of political media bias," Working Paper 175/2016, Helmut Schmidt University, Hamburg.

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    More about this item

    Keywords

    Media bias; Colombia; Nominal Exchange Rate (NER); Negative Binomial Regression Model (NBRM); probit model.;
    All these keywords.

    JEL classification:

    • A19 - General Economics and Teaching - - General Economics - - - Other
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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