Do Politicians Put Their Money Where Their Mouth Is? Ideology and Portfolio Choice

• 成果类型: Article
• 署名作者: Aiken, Adam L.; Ellis, Jesse A.; Kang, Minjeong
• 署名单位: Elon University; North Carolina State University; Heriot Watt University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2018.3175
• 发表日期: 2020
• 页码: 376-396
• 关键词: political ideology; portfolio choice; Socially responsible investing; SALIENCE; quid pro quo; behavioral consistency

摘要

We examine the role of political ideology in portfolio formation by studying a unique set of investors whose ideology can be precisely captured by a well-defined, continuous measure and whose personal asset allocation decisions are mandatorily disclosed, namely, the members of the U.S. Congress. As such, we overcome important methodological issues facing previous work in this area. We find that politicians with similar beliefs hold similar portfolios and that more liberal members engage in more socially responsible investing (SRI), even within political parties. Politicians disproportionately favor the SRI categories that reflect their favorite issues, while salience plays an important role in activating their ideologically based preferences for SRI. In addition, more ideological investors are less likely to engage in quid pro quo behavior. We conclude that ideology is a pervasive psychological factor that governs decisions across the domains of politics, investing, and, even, ethics.