Do Investors Care about Impact?

Florian Heeb, Julian F Kölbel, Falko Paetzold and Stefan Zeisberger

The Review of Financial Studies, 2023, vol. 36, issue 5, 1737-1787

Abstract: We assess how investors’ willingness-to-pay (WTP) for sustainable investments responds to the social impact of those investments, using a framed field experiment. While investors have a substantial WTP for sustainable investments, they do not pay significantly more for more impact. This also holds for dedicated impact investors. When investors compare several sustainable investments, their WTP responds to relative, but not to absolute, levels of impact. Regardless of investments’ impact, investors experience positive emotions when choosing sustainable investments. Our findings suggest that the WTP for sustainable investments is primarily driven by an emotional, rather than a calculative, valuation of impact.

JEL-codes: D62 G11 G41 Q56 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (21)

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