  This paper studies the semi-parametric identification and estimation of a
rational inattention model with Bayesian persuasion. The identification
requires the observation of a cross-section of market-level outcomes. The
empirical content of the model can be characterized by three moment conditions.
A two-step estimation procedure is proposed to avoid computation complexity in
the structural model. In the empirical application, I study the persuasion
effect of Fox News in the 2000 presidential election. Welfare analysis shows
that persuasion will not influence voters with high school education but will
generate higher dispersion in the welfare of voters with a partial college
education and decrease the dispersion in the welfare of voters with a bachelors
degree.
