Tuesday, 25 May 2021

How Big is the Media Multiplier? Evidence from Dyadic News Data

WZB Talk by Thiemo Fetzer


This paper uses novel data to show how the media amplifies the economic impact of newsworthy events - the media multiplier. Specifically, we combine monthly aggregated and anonymized card activity data from 114 card issuing countries in Turkey, Egypt, Tunisia, Israel and Morocco with a large corpus of news coverage of violent events at these five destinations. To define and quantify the media multiplier we estimate a model in which latent beliefs, shaped by either events or news coverage, drive the behavior of heterogeneous agents. According to the model, card activity falls by 53 percent if a country is regarded as dangerous by all agents - more than half of this effect is due to the media multiplier (http://www.econ.jku.at/t3/veranstaltungen/research_seminar/papers/fetzer.pdf).

Thiemo Fetzer is an Associate Professor in the Economics Department at the University of Warwick and a Visiting Fellow at the London School of Economics.


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