While it makes sense that governments should use social media for effective communication with the public in times of crisis, research suggests that they should understand that their well-intentioned efforts might actually have the effect of exacerbating the problem, rather than mitigating it.
When a crisis occurs (an economic recession, a natural disaster, a health emergency, or an armed conflict), it is essential to establish an appropriate communication process between central governments, emergency response agencies, and the public. The purpose of such communication must be twofold. At one end it must help intensify the efficiency of the emergency response teams. At the other, it must inform the population and contain public concern.
Today, a particularly intense period of simultaneous crises is touching our world. One of its most critical vectors is an unparalleled climate crisis. Global warming is the result of the increasing concentrations of greenhouse gases in the atmosphere. It jeopardises not only the natural environment but also economic stability by increasing both the frequency and intensity of natural disasters and weather extremes, threatening global food security. Combined with the increasing global inflation rate (the World Bank1 estimates that almost 90 per cent of all countries have seen a food price inflation of over 5 per cent between April and June), it has immediate and long-term repercussions for society, leading to poverty and malnutrition.
The role of the government in attenuating such effects is fundamental. Public officers must find a way to organise regulatory responses that can reduce the impact of the crises while mitigating the fears of the population. To develop an efficient communication strategy, one must consider and understand matters of public concern and how public attention might react; otherwise, such communication may not have the expected impact, and it might even have the opposite effects, generating more concern and uncertainty. In our opinion, the moderating effect of public attention affects not only government agencies involved in disaster management, but any institution or large corporation implementing a sensitive communication strategy.
To better understand the behaviour of such communication, we produced an academic study that sought to understand the effects of social media activity and the interaction (either positive or negative) with public attention.
In this study, we analyse the relationship between the social media activity of government agencies involved in disaster management and the agricultural commodity market during a natural disaster or extreme weather conditions and the role that public attention towards global warming plays in intensifying or reducing such effects. Our research shows a significant relationship between social media activity and agricultural commodities futures prices. We also show that higher levels of public concern about global warming intensify the impact of social activity, provoking a more intense market reaction. We go on to explain the results of our study, while providing some insights into how government agencies may better control the impact of social media.
Crisis and use of social media
A natural catastrophe requires timely, targeted, and reliable information. This makes social media a far-reaching tool that facilitates transmission, engagement, and accessibility, at a relatively low cost. Given the high penetration rate across demographic groups2, social media are increasingly being used as a primary source of news and information3, playing an instrumental role during emergencies, crises, and disasters4. Therefore, government agencies involved in crisis management have turned more than ever to social media platforms to alert the population, share information, and enable a two-way channel of communication.
Government communication effects on commodity prices
To explore the effect of social media communication, we analyse5 the use of Twitter by several government agencies involved in disaster management in the United States. For our analysis, we collected Twitter activity related to natural disasters and extreme weather conditions. We chose Twitter because is well established and widely used by government, emergency agencies, and first responders and because it is known as a source or reference of rapidly available information.
Our results indicate that when a crisis occurs, government agencies use social media as communication channels with targeted audiences. The higher the intensity of the natural disaster, the higher the social media activity and traffic, triggering public and market concern about the aftermath and potential losses. The threat of potential shortages and financial losses increases the demand for the commodity, as well as the hedging positions in the futures market, pushing up the commodity price. In other words, social media and trending topics related to natural disasters might act as public attention catalysts and enable a market reaction, leading to increasing demand for the commodity and hedging positions. In addition, our study shows that higher levels of economic policy uncertainty and public concern about global warming intensify the impact of social media communication.
What should governments, citizens, and companies do?
As our results conclude, social media are increasingly being used as a primary source of news and information. Higher levels of social media activity and traffic are associated with more severe natural disasters and extreme weather conditions and, in consequence, with deeper repercussions for the agricultural commodity market. This effect tends to be more pronounced during periods of high economic policy uncertainty and public concern about global warming.
The lessons gathered from our research allow us to provide two simple recommendations that should help to implement a resilient and efficient social media communication strategy.
- Our first piece of advice is simple: “Gauge public concern.” Public attention plays an instrumental role in influencing and moderating the market reaction in periods of crisis. In particular, public attention and concern about global warming has been shown to intensify the impact of social media during periods of natural disasters and weather extremes. Equally important, government agencies involved in disaster management should take into consideration the economic environment when implementing a communication strategy, as higher levels of economic policy uncertainty are associated with deeper market reactions.
- On the other hand, governments should start a practice of measuring the market reaction to each one of their communications. To our knowledge, there is no precise agency in charge of understanding the consequences of government social media behaviour for economic tendencies. We therefore suggest that governments (and companies) should start a data and information analysis practice, for which they can take advantage of academics and scholars that can perform objective inquiries. In following these two recommendations, they will be able to tame (and therefore reduce) the negative impact of such types of announcements on commodity prices and be more aware of the wording, hashtags, images, and overall content that provides a less excessive response of concern from the public.
This article was originally published on May 19, 2023.
About the Authors
Federico Platania is Full Professor at ISG INTERNATIONAL BUSINESS SCHOOL. He holds a PhD in Banking and Quantitative Finance jointly offered by the University Complutense of Madrid, University of the Basque Country, University of Valencia, and University of Castilla-La Mancha and a HDR (Habilitation à Diriger des Recherches) en Sciences de gestion from Aix Marseille Université. His research interests include the study of energy and agricultural markets, climate change, and information and communication technologies.
Celina Toscano it is a passionate professor currently working at ISC Business School in Paris and a PhD candidate at CY Université Paris Cergy. She is a curious person with an interdisciplinary spirit and the willingness and eagerness to explore different topics and opportunities in order to expand her research and teaching repertoire.
Fernanda Arreola is the Dean of Faculty & Research at ISC Paris. She is also a Professor of Strategy, Innovation & Entrepreneurship and a researcher focusing on service innovation, governance, and social entrepreneurship. Fernanda has held numerous managerial posts and possesses a range of international academic and professional experience.
- Food Security Update | World Bank Response to Rising Food Insecurity. Last Updated: 13 March 2023. The World Bank. https://www.worldbank.org/en/topic/agriculture/brief/food-security-update
- 2 The 2022 Social Media Demographics Guide. n.d. Khoros. https://khoros.com/resources/social-media-demographics-guide
- 3 Exposure to opposing views on social media can increase political polarization. 28 August 2018. PNAS. https://www.pnas.org/doi/abs/10.1073/pnas.1804840115
- 4 Social Media and Disasters: Current Uses, Future Options, and Policy Considerations. 6 September 2011. Congressional Research Service. https://mirror.explodie.org/CRS-Report-SocialMediaDisasters-Lindsay-SEP2011.pdf
- 5 Social media communication during natural disasters and the impact on the agricultural market. Technological Forecasting and Social Change. June 2022. https://www.sciencedirect.com/science/article/abs/pii/S0040162522001263