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Good news, bad news, consumer sentiment and consumption behavior

Viet Hoang Nguyen () and Edda Claus ()

Journal of Economic Psychology, 2013, vol. 39, issue C, 426-438

Abstract: We explore the reaction of heterogenous consumers to a range of financial and economic news and find asymmetry in the response to news where consumers react to bad news but not to good news. This asymmetry holds uniformly across heterogeneous consumer groups and is consistent with the popular negativity bias in psychology. We find asymmetric mapping from news to consumer sentiment and from consumer sentiment to aggregate consumption that supports the notion of asymmetric consumption behavior.

Keywords: News; Consumer sentiment; Consumption; Negativity bias (search for similar items in EconPapers)
JEL-codes: D12 D83 D84 E21 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1016/j.joep.2013.10.001

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Handle: RePEc:eee:joepsy:v:39:y:2013:i:c:p:426-438