Do politicians "put their money where their mouth is?" Ideology and portfolio choice

Adam L. Aiken, Jesse A. Ellis, Minjeong Kang

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)
180 Downloads (Pure)


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.

Original languageEnglish
Pages (from-to)376–396
Number of pages21
JournalManagement Science
Issue number1
Early online date30 May 2019
Publication statusPublished - Jan 2020


  • Behavioral consistency
  • Political ideology
  • Portfolio choice
  • Quid pro quo
  • Salience
  • Socially responsible investing

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research


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