Politicians' Asset Allocations and Economic Bill Proposals

53 Pages Posted: 4 Mar 2022 Last revised: 20 May 2023

See all articles by Hyun-Soo Choi

Hyun-Soo Choi

College of Business, Korea Advanced Institute of Science and Technology (KAIST)

Hugh Hoikwang Kim

University of South Carolina, Darla Moore School of Business

Paul Youngwook Kim

College of Business, Korea Advanced Institute of Science and Technology (KAIST)

Date Written: February 22, 2022

Abstract

We study the impact of politicians' asset allocations on their economic bill proposals. Using a novel database of comprehensive financial disclosures of the members of Congress in South Korea, we find that congresspeople with more real estate assets in their portfolios are less likely to propose economic bills that tighten the real estate market. To address endogeneity concerns, we use an instrumental variable uniquely available in our empirical setting: an unexpected earthquake in a local city in South Korea. Controlling for other confounding factors, we argue that the result is driven mainly by politicians' financial interests. Overall, our findings suggest that politicians' personal financial positions have a material impact on their choice of economic bill proposals.

Keywords: real estate, political economy, economic bills, politician

JEL Classification: D72, G38, K25, P16

Suggested Citation

Choi, Hyun-Soo and Kim, Hugh Hoikwang and Kim, Paul Youngwook, Politicians' Asset Allocations and Economic Bill Proposals (February 22, 2022). Available at SSRN: https://ssrn.com/abstract=4040810 or http://dx.doi.org/10.2139/ssrn.4040810

Hyun-Soo Choi

College of Business, Korea Advanced Institute of Science and Technology (KAIST) ( email )

85 Hoegiro Dongdaemun-Gu
Seoul 02455
Korea, Republic of (South Korea)

Hugh Hoikwang Kim (Contact Author)

University of South Carolina, Darla Moore School of Business ( email )

1014 Greene Street
Columbia, SC 29208
United States

Paul Youngwook Kim

College of Business, Korea Advanced Institute of Science and Technology (KAIST) ( email )

85 Hoegiro Dongdaemun-Gu
Seoul 02455
Korea, Republic of (South Korea)

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