The Moderating Effect of Ideological Identification on How Economic News and Economic Growth Impact Individual Economic Perceptions: Evidence From Chile

Abstract

Previous literature argues that macroeconomic conditions and economic news impact socio-tropic assessments. Others find that ideological identification or ideological affinity with the government impact socio-tropic economic views. Here, we test the moderating effect of ideological identification on how economic growth and economic news shape economic perceptions. We test this hypothesis using a dataset that combines monthly polls in Chile (2014–2018), economic news, and economic growth indicators. We find that ideological affinity with the government intensifies the positive impact of good macroeconomic indicators on current and prospective perceptions and, surprisingly, induces more positive current perceptions when negative economic news increases. In turn, ideological affinity with the government is associated with a slightly negative impact of good macroeconomic indicators on current (but not prospective) economic perceptions and a negative impact of negative economic news on current and prospective perceptions. Ideology moderates the effect of macroeconomic indicators and economic news on economic perceptions.