Masters Theses


“Previous studies find evidence of an electoral cycle in equity market returns. During four-year presidential terms, returns tend to be higher in the third and fourth years in comparison to the first and second years. Furthermore, some studies report higher annual stock market returns during Democratic administrations. Although many studies have focused on the White House, there has been much less research conducted on the effect of Congress on future equity market returns. In this study, the relationship between Congress and future market returns is explored in two distinct approaches. First, the percentage of the House of Representatives and Senate controlled by a political party is examined. Logically, the amount of policies a political party can pass into laws is based on the amount of seats it controls. Second, the change in the percentage of seats gained or lost in Congressional elections is observed. By gaining a large amount of seats, a political party can claim its policies as the “will of the people.” As a result, this party could exert more control in these situations. To test these two theories, a modified “partisan view” model is adopted. In this study, it is found there is a negative correlation between the percentage of the House of Representatives controlled by the Democratic Party and future equity market returns. In terms of the Senate, there is a positive correlation. However, these results are not statistically significant at the 10% level. Furthermore, the relationship between the percentage of seats gained or lost by a political party in a Congressional election and future market returns is not significantly significant. Also, the margin of victory, both in terms of the Electoral College and the popular vote, is negatively correlated to future market returns. These results are also statistically insignificant at the 10% level."--Abstract, page iii.


Enke, David Lee, 1965-

Committee Member(s)

Davis, Michael C.
Ramakrishnan, Sreeram


Engineering Management and Systems Engineering

Degree Name

M.S. in Engineering Management


University of Missouri--Rolla

Publication Date

Summer 2005


vi, 36 pages

Note about bibliography

Includes bibliographical references (pages 34-35).

Geographic Coverage

United States


© 2005 Vincent Louis Ovlia, All rights reserved.

Document Type

Thesis - Restricted Access

File Type




Subject Headings

Stock exchanges -- United States
Stock price forecasting -- United States

Thesis Number

T 8749

Print OCLC #


Link to Catalog Record

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