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Good news, bad news, consumer sentiment and consumption behavior

  • Nguyen, Viet Hoang
  • Claus, Edda

We explore the reaction of heterogenous consumers to a range of financial and economic news and find asymmetry in the response to news where consumers react to bad news but not to good news. This asymmetry holds uniformly across heterogeneous consumer groups and is consistent with the popular negativity bias in psychology. We find asymmetric mapping from news to consumer sentiment and from consumer sentiment to aggregate consumption that supports the notion of asymmetric consumption behavior.

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Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 39 (2013)
Issue (Month): C ()
Pages: 426-438

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Handle: RePEc:eee:joepsy:v:39:y:2013:i:c:p:426-438
Contact details of provider: Web page: http://www.elsevier.com/locate/joep

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