We show that the stock market pricing the presidential margin of victory in a nonlinear concave fashion, with a higher price for medium than slight or crushing victories. We conjecture that the margin of victory reflects president confidence and the ability to execute policies. A small margin...

We present an econometric framework that estimate conjoined ‘fixed effect' components to analyze the presidential puzzle, by separating party policy impact on the stock market from each president ability. Our methodology enable us to examine what drives the higher excess return under...

We utilize a novel data about households' reservation returns to reexamine the limited stock market participations and the equity premium puzzles, where instead of asking why households are too averse to risk, we ask why households exhibit greater reservation returns (which reflect the...

This paper demonstrates a strong inverse connection between daily stock returns and Congress in session. Our key conjecture is when Congress is in session, more media attention focuses on congressional activity than on the stock market; the more the news attention is political, the lower the...

This paper shows that the Warren Buffet Indicator (BI) about stock market valuation, measured as the overall stock market value divided by GDP, contains an upward bias and not a proper indicator for three main reasons. Primarily, over 40% of the S&P companies’ earnings is overseas, which makes...

We show that key congress characteristics influence stock market outcomes, and under-diversified congress depresses the performance and upsurge the volatility in the stock market. Our key hypotheses is that congress background influences type, quantity and quality of bills passed, and hence...

An analysis of the Survey of Consumer Finance shows that wealthy investors have a higher return on their stocks than their poorer counterparts. Three key empirical facts emerge: (i) wealthy investors employ more productive search efforts, (ii) financial risk bearing and search efforts are...