Financial Literacy in the Age of Green Investment
40 Pages Posted: 5 Apr 2019 Last revised: 23 Dec 2020
Date Written: December 23, 2020
We conduct a large-scale survey of Swedish households matched to registry data on actual financial choices to measure financial literacy, awareness of environmental tradeoffs, and actual investment behavior. There is low overlap between environmental and financial knowledge and behaviors. Prosocial values towards the environment are associated with both mistaken beliefs about finance and a higher willingness to pay for green financial products, but these effects are weaker among respondents with higher financial literacy. Our results have important implications for both theory and policies supporting sustainable finance as a tool to change firm behavior.
Keywords: sustainability; financial literacy; overconfidence; environmental risks; retirement savings
JEL Classification: G02; G11; G18
Suggested Citation: Suggested Citation