Media Exposure and Stock Market Participation

We use a novel instrument--the local lineup position of business channels--to show that media exposure from cable television increases equity participation by increasing awareness of the stock market for first-time investors. Economically, a one-standard deviation reduction in the lineup position of business channels increases viewership by 6%. Subsequently, the propensity to invest in the stock market increases by 8.8% for the full sample and rises to 21.3% for first-time investors induced into watching by variation in channel position. Media exposure also reduces the likelihood these first time investors exit, keeping them in the stock market for longer.