Tobias Thomas (Director of the Austrian Economic Research Institute EcoAustria): Distribution of information through media channels in democracies

Media play a vital role in the perception and decisions of individuals in both economic and political contexts, as information is often distributed through media channels. However, media can never depict the complete reality and is limited to painting a partial picture. In addition, the portrayed reality is prone to various types of distortions, the so-called media bias. Consequently, decisions by individuals based on information provided by the media might deviate from decisions based on less biased and more comprehensive information. In the first part of the lecture Tobias Thomas, Director of EcoAustria – Institute for Economic research as well as research fellow at the Center for Media, Data and Society (CMDS) of the Central European University (CEU) in Budapest and lecturer at Düsseldorf Institute for Competition Economics (DICE) of Heinrich Heine University Düsseldorf, will present how media coverage affects the worries of the population as well as the short- and long-term political preferences, namely party affiliation and voting intention. For the empirical analysis, media data are merged with the comprehensive German Socio Economic Panel (SOEP) and the German Politbarometer survey. To account for endogeneity, instrumental variable estimations are employed. In the second part of the lecture Tobias Thomas will present a new measure of political media bias by analyzing articles and newscasts with respect to the tonality on political parties and politicians. On this basis a new Political Coverage Index (PCI) is introduced sorting the outlets in the political left to right spectrum. The PCI is applied to investigate whether the media fulfill their role as the fourth estate, i.e. provide another level of control for government, or whether there is evidence of government capture.