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Bias in economic news: the reporting of nominal exchange rate behavior in Colombia

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  • Taborda, Rodrigo

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.
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  • Taborda, Rodrigo, 2013. "Bias in economic news: the reporting of nominal exchange rate behavior in Colombia," LSE Research Online Documents on Economics 123249, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:123249
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    Cited by:

    1. Ralf Dewenter & Uwe Dulleck & Tobias Thomas, 2016. "Does the 4th Estate Deliver? Towards a More Direct Measure of Political Media Bias," NCER Working Paper Series 116, National Centre for Econometric Research.

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    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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