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News Induced Uncertainty and Consumer Confidence

Sat, May 24, 16:30 to 17:45, Seattle Sheraton, Metropolitan Ballroom

Abstract

Despite constant fluctuations in consumer confidence these are not well understood. Research has demonstrated a link between media coverage and changes in consumer confidence at the aggregate level but less is known at the individual level. The current study, using a two-wave national panel survey and a media content analysis, demonstrates how individual exposure to news focusing on unknown consequences impacts changes in consumer confidence. Additionally it shows how this relationship is partially mediated by the sense of economic uncertainty evoked. The article contributes with a new theoretical framework that links unknown economic consequences in different types of economic news with changes in consumer confidence. In that sense it bridges insights from research on consumer confidence, economic psychology and media effects.

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