An empirical analysis of ESG and time preferences

Abstract

This paper empirically analyses the relation between ESG preferences and time preferences. The theory suggests that people with a low time preferences, thus who are more patient, have higher ESG preferences. This relation is tested by data from the DHS survey and the LISS panel. The analysis is divided into two parts, the analysis that looks at the DHS data set and the analysis that looks at the LISS panel data set. The analysis of the DHS data set focuses on the environmental part of the investor’s ESG preferences in relation with the time preferences. The analysis of the LISS panel data set focuses on the social and governmental part of the investor’s ESG preferences in relation with the time preferences. This paper shows a significant negative relation between Environmental preferences and time preferences. This relation only holds for green investments, and it was not seen regarding green savings. There was no significant relation between Social and Governmental preferences and time preferences.