Financial Accounting Blog

Monday, March 01, 2004

The Decembrist (Mark Schmitt) respondes to the article from the New York Times below by questioning the small sample size used in the study

The study does note that of the 6,000 stock transactions he tallied in the six-year period, more than half were accounted for by only four Senators: the late Claiborne Pell of Rhode Island, John Danforth of Missouri, John Warner of Virginia, and Barbara Boxer of California.
Ziobrowski concludes based on this method that "trading with an informational advantage is common among Senators." Yet in the first years of the study, which is when the advantage appears, only 25-27 of the hundred Senators traded stocks at all. So it is not "common," since it is actually not common for Senators to trade stocks at all.
I'm still undecided about this. If the study was on anything else I'd probably ignore it, but it is always good to have an excuse to bash US Senators!