Congressional Herding

ABSTRACT We investigate the stock trades of members of the United States Congress from July 2012 through March 2023. We find that Congress members herd, but their patterns differ markedly from those of institutional investors. Congress members follow their own trades over others' trades by a ratio of 61 to 1. When market and firm uncertainty rise, however, Congress members follow others' trades 200% more while following their own trades 50% less. We interpret this evidence as suggestive of informational cascades contributing to congressional herding. Furthermore, while congressional buys earn small abnormal returns, their magnitude decreases when Congress members herd.