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Good news, bad news, consumer sentiment and consumption behavior

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  • Nguyen, Viet Hoang
  • Claus, Edda

Abstract

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.

Suggested Citation

  • Nguyen, Viet Hoang & Claus, Edda, 2013. "Good news, bad news, consumer sentiment and consumption behavior," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 426-438.
    • Handle: RePEc:eee:joepsy:v:39:y:2013:i:c:p:426-438
    DOI: 10.1016/j.joep.2013.10.001
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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