A Breath of Change: Can Personal Exposures Drive Green Preferences?
59 Pages Posted: 4 Dec 2024
Date Written: May 31, 2024
Abstract
Are investors' preferences for responsible investing affected by their idiosyncratic personal experiences? Using a comprehensive dataset with hospital visits and information on portfolio holdings by retail investors in Denmark, we show that when an investor's child is diagnosed with a respiratory disease, the investor decreases (increases) portfolio weights of ``brown" (``green”) stocks but does not alter their holdings of ESG funds. Consistent with parents attributing respiratory diseases to air pollution, we find no effects for non-respiratory diseases. The results are stronger for more severe diseases and are driven by parents who live with their children.
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