Sentiment Spillover: Evidence from Two Environmental Disasters

Abstract

This paper studies the spillover effects of sentiment facilitated by social connection following the outbreak of two environmental disasters. Utilizing individual-level survey data from Gallup and county-level social connectivity data from Facebook, the paper finds that residents who are residing in more socially connected counties report significantly lower level of sentiment on the month of the event, and the effect persists through the next month. The findings are robust to alternative hypotheses, such as possible ties other than social connection and differing set of observable characterisitcs that alters underlying distribution of respondents’ sentiments in different regions.

Keywords: sentiment spillover, household finance, household sentiment, social network

JEL Classification: D10, D83, D84