You’ve probably seen the Nancy Pelosi Stock Tracker on X or else a collection of articles and books exposing the secret and lucrative world of congressional insider trading.

The underlying claim behind these stories is intuitive and compelling. Regulations, taxes, and subsidies can make or break entire industries and congresspeople can get information on these rules before anyone else, so it wouldn’t be surprising if they used this information to make profitable stock trades.

But do congresspeople really have a consistent advantage over the market? Or is this narrative built on a cherrypicked selection of a few good years for a few lucky traders?

Is Congressional Insider Trading Real

There are several papers in economics and finance on this topic

First is the 2004 paper: Abnormal Returns from the Common Stock Investments of the U.S. Senate by Ziobrowski et al. They look at Senator's stock transactions over 1993-1998 and [...]