Do retail investors pick green investments?
We review a recent paper entitled ‘Why Do Retail Investors Pick Green Investments? A Lab-in-the-Field Experiment with Crowdfunders’ by Christoph Siemroth and Lars Hornuf. The paper was published in the Journal of Economic Behaviour & Organization in May 2023.
- The authors find that a majority of investor participants choose social and environmental impact over higher returns on the condition that the impact is high enough.
- The experiment also found that investors allocate a larger share of funds to green projects if they value environmental impact more and if they expect a higher return.
- The data was collected on a crowdsourced platform, and the survey and experiment was performed via the online survey software Qualtrics.
- Participants could choose between three different environmental or social causes. The two environmental causes were carbonfootprint.com and Greenpeace. The third cause was the Red Cross, representing a social impact.