Financial Media as a Money Doctor: Evidence from Refinancing Decisions

68 Pages Posted: 19 Nov 2020 Last revised: 21 Aug 2021

See all articles by Lin Hu

Lin Hu

Australian National University (ANU)

Kun Li

Australian National University (ANU)

Phong T. H. Ngo

Australian National University (ANU)

Denis Sosyura

Arizona State University

Date Written: October 2, 2020

Abstract

We find that the viewership of business television raises the propensity of households to refinance their homes when doing so is financially advantageous. To estimate the effect of business TV, we exploit the staggered entry of Fox Business Network (FBN) into zip-codes across the U.S. Exposure to FBN is associated with a 6.5% increase in local refinancing volume in response to a 100 bps drop in mortgage interest rates. We confirm the media effect on refinancing by using an instrument for TV viewership, which exploits exogenous variation in the channels’ ordinal positions. The media influence is stronger for minority and riskier applicants. Overall, business TV likely raises financial awareness and serves as a nudge against inertia.

Keywords: media, household finance, financial literacy, refinancing

JEL Classification: G50, G51, G53, R20, R21

Suggested Citation

Hu, Lin and Li, Kun and Ngo, Phong T. H. and Sosyura, Denis, Financial Media as a Money Doctor: Evidence from Refinancing Decisions (October 2, 2020). Available at SSRN: https://ssrn.com/abstract=3679875 or http://dx.doi.org/10.2139/ssrn.3679875

Lin Hu

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Kun Li

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Phong T. H. Ngo

Australian National University (ANU) ( email )

RSFAS, College of Business and Economics
Australian National University
Canberra, Australian Capital Territory 0200
Australia
+61 2 6125 1079 (Phone)

HOME PAGE: http://cbe.anu.edu.au/people/rsfas/phong-ngo/

Denis Sosyura (Contact Author)

Arizona State University ( email )

Tempe, AZ 85287-3706
United States

HOME PAGE: http://www.public.asu.edu/~dsosyura/

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