The impact of newspapers on consumer confidence: does spin bias exist?

Karel Jan Alsem, Steven Brakman, Lex Hoogduin, Gerard Kuper

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

It is sometimes argued that news reports in the media suffer from biased reporting. Mullainathan and Shleifer (2002, 2005) argue that there are two types of media bias. One bias, called ideology, reflects a news outlet's desire to affect reader opinions in a particular direction. The second bias, referred to as 'spin' or 'slanting', reflects the outlet's attempt to simply create a memorable story. Competition between outlets can eliminate the effect of ideological bias, but increases the incentive to spin or slant stories. We examine whether we find some evidence of spin in Dutch newspaper reporting on the state of the economy. If newspapers are indeed able to create memorable stories this should, according to our hypothesis, affect the opinion of readers with respect to the state of the economy. Sentiments about the actual state of the economy could be magnified by spin. As a result, consumer confidence-a variable that routinely measures the opinion on the state of the economy-can be expected to be affected not only by economic fundamentals, but also by the way these fundamentals are reported. We construct a variable that reflects the way consumers perceive economic news reported in newspapers. We find that this variable indeed has a significant impact on consumer confidence, which is short-lived.
Original languageEnglish
Pages (from-to)531-539
JournalApplied economics
Volume40
Issue number5
DOIs
Publication statusPublished - 2008
Externally publishedYes

Keywords

  • newspapers
  • consumer confidence

Cite this

Alsem, Karel Jan ; Brakman, Steven ; Hoogduin, Lex ; Kuper, Gerard. / The impact of newspapers on consumer confidence : does spin bias exist?. In: Applied economics. 2008 ; Vol. 40, No. 5. pp. 531-539.
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The impact of newspapers on consumer confidence : does spin bias exist? / Alsem, Karel Jan; Brakman, Steven; Hoogduin, Lex; Kuper, Gerard.

In: Applied economics, Vol. 40, No. 5, 2008, p. 531-539.

Research output: Contribution to journalArticleAcademicpeer-review

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