The purpose of this study was to examine the role of different channels of information on individual consumer confidence. Individual consumer confidence is a person’s expectations of future economic conditions. Consumer confidence has economic and political consequences for society. Scholars do not agree on the role of different sources of information in consumer confidence, particularly the role of mass media. Many scholars consider the economy and unemployment, which is known to influence consumer confidence, to be obtrusive, meanings that individuals can acquire issue information from direct experience or observation. Evidence supports both news and direct experience or observation as significant sources of information.
This study examined the effects of attention to news about the economy, interpersonal discussion of the economy, and local unemployment rates on individual consumer confidence. Data were from six months of the Buckeye State Poll during a period of worsening economic conditions in 2001 and 2002. The survey included a unique set of attention to news about the economy measures that focused on different geographic domains and types of media. Local unemployment rates were matched to individuals based on county of residence.
Both personal economic experience and attention to news about the economy were significant predictors of individual consumer confidence. Personal economic experience was measured by household unemployment. The majority of households do not experience unemployment, meaning the attention to news about the economy should provide their information. However, attention to news about the economy had a small effect. Of the different forms of attention to news about the economy, attention to news about the local economy on television had the strongest effect. Interpersonal discussion of the economy had no effect. Observation of the economy via local unemployment rates had an unexpected relationship with confidence. Increasing unemployment over a twelve-month period was often associated with higher levels of confidence, not lower levels. This may have been due to the historic circumstances following the September 11 terrorist attacks or because of seasonal factors in some of the unemployment data. The study concludes with a discussion of its limitations and suggestions for future research.