Households’ Investments in Socially Responsible Mutual Funds
37 Pages Posted: 4 Mar 2018 Last revised: 28 Jan 2022
Date Written: November 9, 2020
We use a large administrative panel data set to study which characteristics are related to households' investments in socially responsible investing (SRI) mutual funds. To isolate financial and non-financial preferences for SRI investments, we distinguish between two types of SRI funds; ESG and charitable funds. We also analyze to what extent affluence and age play a role in SRI. We find that participation in SRI funds is lower for young and retired investors. Moreover, we find that young adults are more often ESG investors, while retired investors are more likely to participate in charitable funds. Further, financial wealth is important for SRI participation but becomes less relevant once investors are sufficiently rich. For the exposure to SRI funds, the overall picture is quite different as it is negatively related to wealth, income, risky share, and education.
Keywords: household finance, portfolio choice, retail investors, SRI investments
JEL Classification: D14, D31, D64, G11, G51
Suggested Citation: Suggested Citation