Inflation Expectations, Perceptions and News Media: Regional Differences in Switzerland (original) (raw)

This paper studies newspaper inflation reporting and its effects on inflation expectations and perceptions in Switzerland. We create a standard quantitative inflation news measure and a novel qualitative measure of inflation sentiment for newspapers written in two national languages. To study the effects of news on inflation expectations and perceptions, we first check for the existence of a negativity bias in inflation news reporting. Second, we exploit the language barrier in Switzerland to analyse the effects of inflation media shocks on regional inflation expectations and perceptions. We highlight three findings. First, we find no evidence of a negativity bias in French and German-written newspapers. Second, both the quantitative and qualitative news significantly affect expectations and perceptions. Third, we document socio-demographic differences in the effect of news across the language border.