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The Media's Role in Influencing Perceptions of Housing Values and the Resulting Impact on the Macroeconomy
Author(s) -
McCollough John,
Karani Komal
Publication year - 2014
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/ecaf.12047
Subject(s) - recession , perception , affect (linguistics) , economics , value (mathematics) , great recession , labour economics , national economy , demographic economics , monetary economics , macroeconomics , psychology , economic system , communication , neuroscience , machine learning , computer science
The housing market is a major component of the economy and persistent negative media reports can adversely affect perceptions and expectations of homeowners as to the value of their home. As a result, households reduce their expenditures and increase their savings in an effort to rebuild lost wealth. In the short run the economy suffers and the recession is magnified. This paper demonstrates, through an empirical study, how negative media reports regarding the deteriorating conditions of the national housing market affects what households feel their housing is worth.