The role of open-ended questions in narrowing the intention behavior gap for sustainable retail investors

37 Pages Posted: 23 May 2024

See all articles by Tobias Wekhof

Tobias Wekhof

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Date Written: May 22, 2024

Abstract

Survey respondents often claim an interest in sustainable investment options but do not buy them -frequently called the intention-behavior gap. Here, we compare retail investors' sustainability intentions through open-ended questions requiring a written answer to closed-ended questions, where respondents chose several pre-defined topics. All respondents answered both question types in random order and then chose among hypothetical investments with different levels of sustainability. Both question types gave similar regression coefficients when explaining a hypothetical investment choice, but the open-ended responses showed a higher out-of-sample predictive power. Moreover, the open-ended responses contained fewer topics than closed-ended answers, with a clear ranking of the topics' frequency. In contrast, most closed-ended topics appeared with similar frequency. Many respondents would choose an option in the closed-ended question but not write about it, which led to inconsistent answers. We show that these inconsistencies can negatively bias the explanatory power of closed-ended responses for the investment choice.

Keywords: sustainable consumption, intention behavior gap, household finance, open-ended questions, survey methods, text-analysis, natural language processing

JEL Classification: D91; G11; C83

Suggested Citation

Wekhof, Tobias, The role of open-ended questions in narrowing the intention behavior gap for sustainable retail investors (May 22, 2024). Available at SSRN: https://ssrn.com/abstract=4838449 or http://dx.doi.org/10.2139/ssrn.4838449

Tobias Wekhof (Contact Author)

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

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