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Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives


  • Ziobrowski Alan J

    (Georgia State University)

  • Boyd James W

    (Lindenwood University)

  • Cheng Ping

    (Florida Atlantic University)

  • Ziobrowski Brigitte J.

    (Augusta State University)


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).

Suggested Citation

  • Ziobrowski Alan J & Boyd James W & Cheng Ping & Ziobrowski Brigitte J., 2011. "Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives," Business and Politics, De Gruyter, vol. 13(1), pages 1-24, April.
  • Handle: RePEc:bpj:buspol:v:13:y:2011:i:1:n:4

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    References listed on IDEAS

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    Cited by:

    1. repec:ces:ifodic:v:13:y:2015:i:3:p:19173857 is not listed on IDEAS
    2. Ayakeme Ebiwarefa Whisky & Chinedu B. Ezirim, 2014. "Do Investors Make Abnormal Returns Consistently? An Econometric Investigation in the Nigerian Capital Market," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 5(2), pages 115-120, April.
    3. Mark A. Zupan, 2015. "Rent-Seeking on the Supply Side of Politics," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(3), pages 06-14, October.
    4. Cohen, Lauren & Diether, Karl & Malloy, Christopher, 2013. "Legislating stock prices," Journal of Financial Economics, Elsevier, vol. 110(3), pages 574-595.
    5. Raymond Fisman & Florian Schulz & Vikrant Vig, 2012. "Private Returns to Public Office," NBER Working Papers 18095, National Bureau of Economic Research, Inc.

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