Abnormal returns from the common stock investments of Members of the U.S. House of Representatives
Document Type
Article
Publication Title
Business and Politics
Abstract
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
https://doi.org/10.2202/1469-3569.1308
Publication Date
4-2011
Recommended Citation
Ziobrowski, Alan J.; Boyd, James W.; Cheng, Ping; and Ziobrowski, Brigitte J., "Abnormal returns from the common stock investments of Members of the U.S. House of Representatives" (2011). Faculty Scholarship. 240.
https://digitalcommons.lindenwood.edu/faculty-research-papers/240