The Role of Media Bias in Xenophobia

We study how biased media may spread xenophobia. We analyze cable TV News channel transcripts and document that Fox News, one of the most popular cable channels, associated the COVID-19 Pandemic with China more than the competitor channel, MSNBC. Next, utilizing our own survey, we estimate the heterogeneous treatment effects of watching Fox News on individual racial animus and perceptions of social tolerance on anti-Chinese xenophobia. We find that watching Fox News is associated with higher racial animus and the perception that xenophobia would be tolerated by the general public at every quantile. Interestingly, We do not find such an effect for other competitive channels. Next, we use a general equilibrium model of xenophobia in Deng and Hwang (2023) to predict how xenophobia would change while varying the proportion of the population watching Fox News. In general equilibrium, people perceive the reputational harm associated with xenophobia as much smaller when more people watch Fox News, so the average level of xenophobia in the economy becomes more responsive to the proportion of the population watching Fox News compared to partial equilibrium, which assumes the same reputational consequence from xenophobia. That is, the effect of media bias on xenophobia crucially depends on the popularity of the media due to changing social norms on xenophobia.