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Tuesday, March 22, 2005

Terrorism Betting Markets: Inquiring Minds Want To Know (Bryan Caplan)

People on both the political right and the political left talk a lot about media bias. However, some of the the slant on at least one Economics topic seems to be based on the level of reporters' information. Bryan Caplan From EconLog reports on a very clever study by Robin Hanson from George Mason University, titled The Informed Press Favored the Policy Analysis Market. She analyzes media coverage of the Policy Analysis Market (the "terror futures" market), and finds that whether the article is generally positive or negative is significantly related to how informed the reporter is:

She found that the degree to which the article had a positive impression was correlated with ALL of the following signs that the journalists involved knew what they were talking about:

1. mentioning someone with firsthand knowledge

2. time since the media firestorm

3. article length

4. a news versus an opinion style

5. the periodical's prestige

6. the periodical's frequency

Click here for the entire article.

I think it's generally hard to find good commentary on economic matters in the popular press. Many reporters nowadays would benefit from a class or two in economics or finance.

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