Media consumption, macroeconomic expectations, and financial decision-making

With increasing economic uncertainty in the United Kingdom, the opportunity to investigate potential determinants of economic expectations and how these expectations impact individual decision-making presents itself. Such insight has important implications for macroeconomic conditions and has the potential to play an important role in evidence-based policy making.

This research contributes to a nascent but rapidly growing literature on the role of media in macroeconomic expectation formation and individual-level economic/financial decision-making. As narratives about macroeconomic phenomena can differ drastically across news media types, this research will first explore the effect of different media consumption, including 'non-traditional' media such as social and sensationalist media, on expectations about macroeconomic outcomes which feed into economic and financial decision-making, within the realms of intertemporal and risky choice.

Expectations concerning house prices, interest rates and inflation will feature in the research design.

Poor financial literacy is recognized as a global concern and socioeconomic status is known to influence macroeconomic expectations. In an extension to the initial research question, the potentially mediating role of financial literacy, along with generational and socioeconomic differences in lived experiences, on the effect of media consumption on expectation formation and financial decision-making will be examined.

This project will also contribute to literature exploring the related fundamental question of the demand for news and how information acquisition in a naturalistic setting affects narratives and expectations, including whether people select certain news because they tend to have more trust in ideologically-aligned sources or because they want to confirm their existing beliefs.