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

Author

Listed:
  • Besley, Tim
  • Fetzer, Thiemo
  • Mueller, Hannes

Abstract

This paper estimates the size of the media multiplier, a 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 show that within our sample, media reporting more than doubled the effect of events in Tunisia and speculate about the role of the media in driving international travel patterns. This concept can easily be expanded to other contexts and settings.

Suggested Citation

  • Besley, Tim & Fetzer, Thiemo & Mueller, Hannes, 2023. "How Big is the Media Multiplier? Evidence from Dyadic News Data," CEPR Discussion Papers 18349, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18349
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    More about this item

    Keywords

    News shocks; Media; Social media; Behavioral economics; Network spillovers;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • F1 - International Economics - - Trade
    • L8 - Industrial Organization - - Industry Studies: Services

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