The Role of Media Slant in Elections and Economics

We formalize the concept of media slant as a relative emphasis on different issues of political interest by the media, and we illustrate the effects of the media choice of slant on political outcomes and economic decisions in a rational expectations model. In a two-candidate election, if the media is biased in favor of the underdog, then it will put more emphasis on issues with a large electoral impact, hoping that the news will deliver an upset victory. Whether citizens are better off with media biased in favor of the underdog or the frontrunner depends on the importance of choosing the "right" candidate for citizens versus the impact of political news on the private economic decisions of voters. Balanced media, giving each issue equal coverage, may be worse for voters than partisan media.