Abstract:
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 spending data from 114 card issuing countries in 5 destination countries (Turkey, Egypt, Tunisia, Israel and Morocco) with a large corpus of news coverage of violent events in these destinations. To define and quantify the media multiplier we estimate a model of how media coverage helps shape beliefs about risks. When a country is perceived as dangerous by all potential visitors, aggregate spending falls by 53 percent with more than half of this effect due to the media multiplier.
Thiemo Fetzer ist Associate Professor of Economics at the University of Warwick. He is also affiliated with the Centre for Competitive Advantage in the Global Economy (CAGE) at University of Warwick, the Spatial Economics Research Centre (SERC) at London School of Economics, the Centre for Economic Policy Research and the Pearson Institute at University of Chicago.
Selected Publications:
* Tariffs and Politics: Evidence from Trump’s Trade Wars, joint with Carlo Schwarz, forthcoming, Economic Journal
* Coronavirus Perceptions And Economic Anxiety, joint with Lukas Hensel, Johannes Hermle, Christopher Roth, forthcoming, Review of Economics and Statistics
* Did Austerity Cause Brexit?, American Economic Review, 2019
* The Welfare Cost of Lawlessness: Evidence from Somali Piracy, joint with Tim Besley and Hannes Mueller, Journal of the European Economics Association, 2015.