Media Effects on Consumer Sentiment about the Economy

I recently turned in a literature review about media effects on consumer sentiments regarding economic conditions for my Senior Thesis. My general findings were that, when people are exposed to increased amounts of negative economic news, they believe that poor economic times will continue (not really an earth-shattering discovery I guess). However, when economic times are positive, people generally do not assume that prosperous times will continue. Why is that?

I believe part of the reason is because of the disproportionate amount of negative news on television--causing people to not comfortably accept positive news. Even when there are positive economic news stories, they can be framed in negative ways that makes even good news seem bad. Basically I think people hear the rare positive economic news story and think that such a story is rare, and not likely to happen again anytime soon. The fact that the media influences people, even on the smallest of levels, is evidence of the power the media has to set the agenda (see McCombs and Shaw's Agenda-Setting Theory).


Awhile ago The Economist ran a series of articles about the "r-word" (recession), and proposed that talking about recession may actually cause one. As people hear more about the economy in a negative light they start to believe that economic times are getting tougher, and they may constrain their spending, which in turn could lower GDP. In the research I did, (which granted, is that of an undergraduate college student) I did not find any studies that talked about direct connections between media effects and consumer spending behaviors. Does anyone think such a connection exists?

I feel like this is such an interesting area of research and needs a much larger bank of literature before any serious conclusions or solutions can be made.


Hester & Gibson (2003)
Wu et al (2002)