How big is the media multiplier? Evidence from dyadic news data

Besley, Timothy, Fetzer, Thiemo and Mueller, Hannes (2023) How big is the media multiplier? Evidence from dyadic news data. Review of Economics and Statistics. ISSN 0034-6535 (In Press)

Text (How_Big_is_the_Media_Multiplier__Evidence_from_Dyadic_News_Data__1_) - Accepted Version Download (4MB)

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Abstract

This paper estimates the size of the media multiplier, an easily generalizable model-based measure of how far media coverage magnifies the economic response to shocks. We combine monthly aggregated and anonymized credit card activity data from 114 card issuing countries in 5 destination countries with a large corpus of news coverage in issuing countries reporting on violent events in the destinations. To define and quantify the media multiplier we estimate a model in which latent beliefs, shaped by either events or news coverage, drive card activity. According to the model, media coverage can more than triple the economic impact of an event. We document, through our model, that this effect is highly heterogenous and depends on the broader media representation of countries in each others news. We speculate about the role of the media in driving international travel patterns an.

Item Type:	Article
Additional Information:	© 2023 MIT Press
Divisions:	Economics
JEL classification:	O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General F - International Economics > F5 - International Relations and International Political Economy > F50 - General D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General F - International Economics > F1 - Trade > F10 - General L - Industrial Organization > L8 - Industry Studies: Services > L80 - General
Date Deposited:	17 Nov 2023 11:39
Last Modified:	17 Nov 2023 11:39
URI:	http://eprints.lse.ac.uk/id/eprint/120778

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