Determinants of individual sustainable investment behavior - A framed field experiment

Abstract

This paper empirically analyzes which different pecuniary and non-pecuniary motives are relevant for sustainable investments at the individual level. We examine data from an incentivized framed field experiment that was part of an online survey among a broad sample of financial decision makers in Germany. We find strong preferences for sustainable funds. These preferences are driven by both pecuniary and non-pecuniary motives. We can largely confirm the results of previous studies showing that social preferences are key to explain individual sustainable investing. In addition, we identify feelings of warm glow, financial literacy, and environmental values as further key factors. Feelings of warm glow are most relevant of these factors. Our results are thus consistent with other recent results by Heeb et al. (2022), suggesting that positive emotions play an important role in sustainable investment behavior. Our findings provide useful implications for mobilizing individual investors for sustainable development.