Profiting from Real Estate: So Easy a Congressman Can Do It
71 Pages Posted: 8 Apr 2021 Last revised: 26 May 2022
Date Written: May 24, 2022
We provide the first analysis of U.S. Congress members’ real estate activity by combining their financial disclosures with property-level transactions. Active Congress members outperform average homeowners by 3.24% annually; they also outperform former members, financial professionals, and doctors. National-level market timing explains 30\% of the outperformance, neighborhood-level explains 50%, and hyper-local or property-specific factors explain the remainder. A “buy-sell” index of Congress members’ transactions forecasts returns on the U.S. housing index. These findings suggest that superior information drives most of the outperformance. We fail to detect side-payments or bribery, however Federal transfers are higher to places where Congress members own.
Keywords: Real estate, housing returns, U.S. Congress, politicians
JEL Classification: E43, G21, J11
Suggested Citation: Suggested Citation