Are We Becoming Greener? Life-time Experiences and Responsible Investment

Abstract

We exploit account-level data from the Shanghai Stock Exchange to investigate how life-time experiences affect individual investors’ demand for ESG stocks. We show that ESG demand is shaped by economic and non-economic experiences, such as growing up in a region with more pro-social values, being exposed to increased pollution or to a natural disaster. Recent experiences tend to matter more, and noneconomic experiences are particularly important to explain how investors change their ESG demand during their trading life. We provide suggestive evidence that these experiences affect investors’ intrinsic preferences for ESG stocks.

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Reference

Milo Bianchi, Zhengkai Liu, and Gang Wang, “Are We Becoming Greener? Life-time Experiences and Responsible Investment”, TSE Working Paper, n. 22-1382, April 2022.