Abstract
This study examines the real estate investments of members of the United States House of Representatives from 1985 to 1995 with a focus on agency theory. The real estate holdings are characterized in terms of the number of properties owned, the reported value of the properties, property types, the property locations and transactions. Representatives are found to hold more real estate when compared to those of other investors in the United States with similar levels of income. Representatives also seem to time the market better, presumably because they understand more about the implications of the changes in tax laws they enacted. Thus, the Tax Reform Act of 1986 caused House members to reduce their real estate holdings much faster than other U.S. investors. This lower level of real estate investment may also have reduced the economic linkages between Representatives and their constituents, which might affect their incentive to fight for the interests of their constituents.
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