The Confusion of Taste and Consumption: Evidence from a Stated-Choice Experiment

50 Pages Posted: 7 Jun 2022 Last revised: 9 Nov 2022

See all articles by Philipp Kleffel

Philipp Kleffel

University of Bamberg

Matthias Muck

University of Bamberg

Date Written: May 31, 2022

Abstract

In this research, we conduct a stated choice experiment with German retail investors to elicit their preferences with respect to financial materiality of sustainability information. We find that there are market participants who are not able to distinguish between information related to sustainability and financial performance. In particular, investors seem to overreact to bad financially material sustainability information. Others seem to be prone to affect as they are intrinsically motivated to “do good” and erroneously project sustainability information onto future dividends, regardless of materiality. Our results highlight the importance of establishing appropriate classification systems for sustainability reporting.

Keywords: Sustainable investing, Stated choice experiments, Materiality, Salience, Sustainability reporting, Investor behavior

JEL Classification: G11, G41, Q56, M48

Suggested Citation

Kleffel, Philipp and Muck, Matthias, The Confusion of Taste and Consumption: Evidence from a Stated-Choice Experiment (May 31, 2022). Available at SSRN: https://ssrn.com/abstract=4124107 or http://dx.doi.org/10.2139/ssrn.4124107

Philipp Kleffel (Contact Author)

University of Bamberg ( email )

Kaerntenstr. 7
Bamberg, 96052
Germany

Matthias Muck

University of Bamberg ( email )

Kärntenstr. 7
Bamberg, 96052
Germany
+49-(0)951-860-2091 (Phone)

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