Review of Financial Studies Vol. 36 No. 5 2023

Do Investors Care about Impact?

Florian Heeb¹; Julian F. Kölbel²; Falko Paetzold³; Stefan Zeisberger⁴

¹ University of Zürich MIT Sloan, USA and , Switzerland · ² University of St. Gallen , Switzerland and MIT Sloan, USA · ³ University of Zürich EBS University, Germany and , Switzerland · ⁴ Radboud University , the Netherlands and University of Zürich, Switzerland

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.

DOI

10.1093/rfs/hhac066

Volume

36

Issue

5

Pages

1737-1787

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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