Ann Owen will share all data and coding for replication purposes.
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Original Article
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Good News, Bad News, and Consumer Confidence†
Article first published online: 11 SEP 2012
DOI: 10.1111/j.1540-6237.2012.00900.x
© 2012 by the Southwestern Social Science Association
Additional Information
How to Cite
Casey, G. P. and Owen, A. L. (2013), Good News, Bad News, and Consumer Confidence. Social Science Quarterly, 94: 292–315. doi: 10.1111/j.1540-6237.2012.00900.x
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Publication History
- Issue published online: 4 FEB 2013
- Article first published online: 11 SEP 2012
- Abstract
- Article
- References
- Cited By
Objectives
We test for asymmetric reactions of consumer confidence and the news media to changes in economic fundamentals. We examine the relationship between media reporting and consumer confidence.
Methods
Using data from the University of Michigan Index of Consumer Sentiment and a new data set on media coverage constructed by ourselves, we estimate time series regressions that explain changes in consumer confidence and media coverage of economic news.
Results
We find evidence of asymmetric reactions by consumers to changes in economic fundamentals; however, we find no evidence of a systematic negativity bias. We also find no evidence of bias in the media. The findings of asymmetric reactions are strengthened when we control for expectations.
Conclusion
Asymmetric reactions in consumer confidence depend on the nature of the economic fundamental that is changing. Reference points are important in determining consumer reaction, but they do not explain asymmetric responses.