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Track M6-2: ESG: Preferences and Policies
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A Breath of Change: Can Personal Exposures Drive Green Preferences? 1Danmarks Nationalbank; 2Indiana University Bloomington; 3Copenhagen Business School Are investors’ preferences for responsible investing affected by their idiosyncratic personal experiences? Using a comprehensive dataset for hospital visits and the information on portfolio holdings by retail investors in Denmark, we show that when an investor’s child is diagnosed with a respiratory disease, the investor decreases (increases) portfolio weights of “brown” (“green”) stocks but does not alter their holdings of ESG funds. Consistent with parents attributing respiratory diseases to air pollution, we find no effects for non-respiratory diseases. The results are stronger for more severe diseases and are entirely driven by parents who live with their children.
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