The direction of media influence: Real-estate news and the stock market

Clive Walker

Journal of Behavioral and Experimental Finance, 2016, vol. 10, issue C, 20-31

Abstract: This paper uses a novel identification strategy to test the influence of news media on the stock market. Because the stock market does not impact the media coverage of the housing market, a relationship between real-estate news and shares of companies engaged in the housing market is attributable media influence. I find that the content of reporting exhibits a significant relationship with stock returns, and the amount of news with the number of trades. These relationships exist even after controlling for known risk factors, housing market performance and intra-week correlation. This finding is consistent with the function of the media as a source of information and sentiment in financial markets.

Keywords: Media; Housing; News; Bubble; Stock market; Real-estate (search for similar items in EconPapers)
JEL-codes: G10 L82 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:10:y:2016:i:c:p:20-31

DOI: 10.1016/j.jbef.2016.02.001

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