Good News in Bad News: How Negativity Enhances Economic Efficacy

Abstract

Negativity is a news ideology, and its negative effects on attitude formation are widely documented. Contrary to this view, the present study demonstrates that negative economic news can in fact be good news. Based on a two-wave national panel survey and a media content analysis, we show that individual exposure to negative economic news enhances internal economic efficacy, a sense of competence in and understanding of the economy. This is good news as internal economic efficacy may facilitate economic evaluations and decision making. The study reveals that changes in economic efficacy are driven by news attention aroused by the negative tone. However, not all individuals are susceptible to such media effects. Higher interest in economic news lowers the impact of negativity on attention arousal.