Thiemo Fetzer, Warwick University

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

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.

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