Green Tastes, Beliefs, and Portfolios: Evidence from Synthetic Investors

Xindi He and Pástor, Luboš

No 22098, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We use LLMs as synthetic survey respondents to elicit green tastes, return beliefs, portfolio allocations, and investment motives from 480 retail and 60 institutional investor identities. Compared with retail, institutions report weaker tastes yet greener portfolio tilts, citing outside pressure. A greener tilt therefore need not indicate a stronger taste for greenness. Retail tastes depend mostly on political affiliation, institutional tastes on type and geography. Beliefs differ across the three ESG dimensions, with high-governance portfolios expected to outperform. We reconstruct survey responses under 2014--2025 information environments using date-masked information modules shuffled across years. Tastes vary little over time, but beliefs about green portfolios become more pessimistic after 2020. The two reconstructed series relate to different real-world data: tastes to measures of green demand, beliefs to measures of attention.

Keywords: Large Language Models; Sustainable investing; Investor beliefs; Portfolio choice (search for similar items in EconPapers)
JEL-codes: C83 G11 G23 G41 Q56 (search for similar items in EconPapers)
Date: 2026-10
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