Can Changes in Sentiments Influence Consumer Behavior? Evidence from the Trump-Russia Investigation

We analyze how consumer spending is affected by the news coverage of the investigation into coordination between Donald Trump's presidential campaign and Russia. Using daily consumption data, we found that Republicans and Democrats responded differently to the news. Increased media coverage led households in counties that voted for Hillary Clinton to spend less: On the days of heaviest news coverage, spending declined by $0.007 to $0.011 per household member for every point added to Clinton's vote share. There is also evidence that in Republican-voting counties the news coverage had the opposite effect