Which private investors are willing to pay for sustainable investments? Empirical evidence from stated choice experiments

By Gunnar Gutsche, Andreas Ziegler. Journal of Banking & Finance, 2019

155 citations recorded by the source corpus.

Based on data from a representative survey among German private financial decision makers that comprised two stated choice experiments for fixed-interest investment products and equity funds, this paper empirically examines whether and which investors are willing to pay for sustainable investments. In fact, our econometric analyses with mixed and latent class logit models reveal strong stated preferences and a considerable willingness to pay (WTP) for sustainable investment products. Furthermore, our mixed logit model analysis implies that the mean WTP for certified sustainable investment products is strongly higher than the mean WTP for the uncertified counterparts. In addition, our estimation results suggest that investors with high feelings of warm glow from sustainable investments, an affinity to left-wing parties, and a strong environmental awareness have a clearly higher mean willingness to sacrifice returns for sustainable investment products than their counterparts. While risk perceptions seem to be additionally relevant for certified sustainable equity funds, they obviously play a negligible role for less risky sustainable fixed-interest investment products.

Subfields: Economics and Econometrics, Management, Monitoring, Policy and Law, Marketing

View Paper: https://www.semanticscholar.org/paper/971689813cdcab8bf2e9865873ed360ad4330522

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Imane El Ouadghiri
2. Khaled Guesmi
3. Björn Rock
4. Yannik Bofinger
5. Andreas Ziegler
6. Kim J. Heyden
7. J. Peillex

In Management, Monitoring, Policy and Law

1. Imane El Ouadghiri
2. Khaled Guesmi
3. J. Peillex
4. Andreas Ziegler

In Marketing

1. Björn Rock
2. Yannik Bofinger
3. Andreas Ziegler
4. Kim J. Heyden

Citations in the corpus

• Corporate Social Responsibility and Market Efficiency: Evidence from ESG and Misvaluation Measures (2020, background): “On the other hand, sustainable investors could also derive non-financial utility through their financial investments (Gutsche and Ziegler, 2019).”
• The pricing of green bonds: external reviews and the shades of green (2020, unknown): “This finding adds to the discussion of whether investors are willing to pay more for certified green and sustainable investments (see e.g., Gutsche and Ziegler 2019).”
• Public Attention to Environmental Issues and Stock Market Returns (2021, background): “First, sustainable investors who take into account the sustainable performance of firms (e.g., Riedl and Smeets, 2017; Gutsche et al., 2019; Gutsche and Ziegler, 2019) might accelerate the process of buying stocks of green and thus sustainable firms to reward them and to divest stocks of conventiona”