Montagnoli, A. and Taylor, K. (Submitted: 2024) Who cares about investing responsibly? Attitudes and financial decisions. Discussion Paper. IZA Discussion Paper (16952). IZA Institute of Labor Economics ISSN 2365-9793
Abstract
The aim of this paper is twofold. Firstly, we investigate the determinants of individual's attitudes towards investing responsibly, based upon Environmental, Social, and Governance (ESG) considerations. Secondly, we look at how important ESG considerations are, over and above socio-economic characteristics including financial literacy and risk attitudes, in explaining whether individuals hold shares and/or equity, and the amount invested in financial assets. Using the UK Financial Lives Survey data which is collected by the Financial Conduct Authority, our analysis reveals that, firstly, individual characteristics have little explanatory power in terms of explaining responsible investments, except for: education; gender; age; and financial literacy. Secondly, those individuals who are interested in future responsible investments are approximately 7 percentage points more likely to hold shares/equity, and have around 77% more money invested in financial assets (i.e. just under twice the amount). We also undertake several sensitivity checks including the role of selection on unobservables and the extent to which the exogeneity assumption regarding interest in future responsible investments can be relaxed, as well as matching estimation techniques to move beyond mere statistical associations.
Metadata
Item Type: | Monograph |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2024 The Author(s). For reuse permissions, please contact the Author(s). |
Keywords: | ESG attitudes; financial literacy; portfolio investment |
Dates: |
|
Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 02 Aug 2024 14:57 |
Last Modified: | 12 Mar 2025 14:15 |
Published Version: | https://www.iza.org/publications/dp/16952/who-care... |
Status: | Published |
Publisher: | IZA Institute of Labor Economics |
Series Name: | IZA Discussion Paper |
Identification Number: | 10.2139/ssrn.4811767 |
Related URLs: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:215296 |