Are We Becoming Greener? Life-time Experiences and Responsible Investment

Abstract

While pro-social attitudes have been shown to affect investment decisions, much less is known on what shapes pro-social attitudes across investors and over time. We investigate how life-time experiences affect investors’ demand for ESG stocks. We exploit account-level data from the Shanghai Stock Exchange, covering the universe of transactions between 2011 and 2019, which we match with individual-level experiences based on investors’ age and location. We show that some experiences, notably experienced market returns and natural disasters, have large and persistent effects on investors’ demand. Our results suggest that these experiences influence the intrinsic value investors attach to responsible investment.