The relation between green preferences and risk preferences

Abstract

A lot of research is focused on sustainability and ESG investing nowadays. This thesis adds to this line of research by investigating the relation between green preferences and risk preferences. It researches this with survey data from the Dutch Household Survey, focusing on the green investments reported by the participating households. More specifically the stated ownership of green investments and the portion of funds invested in green investments are taken into account. It is found that more risk-seeking investors invest a smaller portion of their funds in green mutual funds, a risk-bearing investment. While this finding is robustly, the same relation is not robustly found for investing in green savings accounts. Next to this we found that highly educated people have stronger green preferences and investors with a higher gross income are less drawn to investing in green funds