And Action: TV Sentiment and the US Consumer

With a novel dataset, we test whether sentiment in TV news can be used as a proxy for consumer sentiment in order to explain changes in private consumption growth in the United States. The University of Michigan Index of Consumer Sentiment is taken to compare its explana- tory power with TV sentiment in classical consumer behavior models. We _nd that TV sentiment can be used at least as good a proxy for consumer sentiment as the Index of Consumer Sentiment, while TV sentiment can best explain private consumption behavior with personal income and sav- ings.