ABSTRACT We investigate the causal link between societal signals and policy changes through novel data and a unique empirical setting. Using a corpus with all the opinion columns published in 2017 in the nine major Mexican newspapers (the signals) and data on the universe of individual expenditure programs (the policies), we provide quantitative evidence about government overreactions (in terms of overspending) to differentiated media coverage across various policy topics. First, we test formal models of serial and parallel information processing that relate to the debate between punctuated equilibrium and incrementalism. We find empirical support for the serial processing hypothesis. Second, we frame a natural experiment exploiting two earthquakes that took place in September of the same year. By leveraging the disparity in coverage of opinion columns across both earthquakes, we employ a difference‐in‐differences design and find evidence of the causal relationship between coverage shifts and policy overreactions. Our study sheds new light on a central topic in the study of policy changes and agenda‐setting, and provides quantitative evidence difficult to obtain under conventional empirical frameworks.
Guariso et al. (2026) studied this question.