Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives
A previous study suggests that U.S. Senators trade common stock with a substantial informational advantage compared to ordinary investors and even corporate insiders. We apply precisely the same methods to test for abnormal returns from the common stock investments of Members of the U.S. House of Re...
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| Veröffentlicht in: | Business and politics 2011-04, Vol.13 (1), p.1-22 |
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| container_title | Business and politics |
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| creator | Ziobrowski, Alan J. Boyd, James W. Cheng, Ping Ziobrowski, Brigitte J. |
| description | A previous study suggests that U.S. Senators trade common stock with a substantial informational advantage compared to ordinary investors and even corporate insiders. We apply precisely the same methods to test for abnormal returns from the common stock investments of Members of the U.S. House of Representatives. We measure abnormal returns for more than 16,000 common stock transactions made by approximately 300 House delegates from 1985 to 2001. Consistent with the study of Senatorial trading activity, we find stocks purchased by Representatives also earn significant positive abnormal returns (albeit considerably smaller returns). A portfolio that mimics the purchases of House Members beats the market by 55 basis points per month (approximately 6% annually). |
| doi_str_mv | 10.2202/1469-3569.1308 |
| format | Article |
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| ispartof | Business and politics, 2011-04, Vol.13 (1), p.1-22 |
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| source | Worldwide Political Science Abstracts; Cambridge University Press Journals Complete |
| subjects | abnormal returns Delegates event study Investment Legislative Bodies Legislators Markets Trade U.S. Congress |
| title | Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives |
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