Sources of Economic News and Economic Expectations

Abstract

This article considers the process by which local economic news coverage influences individual evaluations of the economy. We improve on prior research by capturing a wider range of news sources (including national network news, national newspapers, local television news, and local newspapers) and connecting the effects of this coverage on individual level attitudes. We find that current personal financial evaluations, personal financial expectations, and short-term (12-month) expectations for the U.S. economy are related to national network coverage. Local television coverage of the economy is related to personal financial evaluations but not short-term economic expectations and local print news is important in structuring expectations of future business conditions. Overall, the findings illustrate important differences in economic coverage across media outlets and the effects of these differences on economic expectations. Exposure to different sources of economic information have significantly different effects on economic perceptions—suggesting a more complicated and nuanced role for the news media in shaping economic perceptions than indicated by previous research.