What is the media effect?
Media effect is a financial theory that evaluates how to cover the topic by intelligence media affects investors, debtors and consumers. It applies to the activities of the mortgage industry and stock market and measures the influence of the main intelligence stories on expenses, refinancing and investing. It seems that the theory is often called behavioral finances and includes the effect of social media.
One of the most visible trends in the media effect occurs in the mortgage industry. When the main intelligence centers report on declining interest rates, it usually generates a wave of property owners refinancing their loans. Coverage also increases the level of debtors' preparation when significant stories about interest rates appear.
Financial markets can also be influenced by the media effect. It is based on the assumption that individual investors are influenced by the information they receive, whether information is justified or rational or not. This could explain the abnormal changes in stock priceson a market that cannot be rationalized through historical performance or analytical theories. Studies
have shown that the volume of trading normally accumulates after media reports of a particular industry or corporation achieve investors. This could affect the price of shares in a certain area by induction of excessive purchase or sale. Activity on the stock market in a particular sector associated with intelligence stories may appear regardless of the actual value of shares.
The effect of the title represents a different theory related to the media effect and is based on negative news articles. If a company or a certain segment of the economy receives negative printing coverage, this may affect the way consumers spend and how they are willing to invest. The example of this phenomenon focuses on stories about smaller hikes in gas prices. Studies show that these intelligence articles may induce consumers tohave reduced expenditure in otherblasts.
Social media effect analyzes how news spreads over the Internet affects stock prices and business activities. One study dealt with the pages and blogs of social media, which measured how many times a certain celebrity head was mentioned after the disease announced. The analysis found correlation between the effect of social media and changes in business shares.
It seems that the media effect and its influence on financial behavior are paid at international level. The University of Hong Kong conducted a study in 2009, revealing that when people change, it leads to changes in behavior in financial matters. The study by 300 investors has discovered a connection between investors' behavior and media reports to which the participants have been issued.