Interview with Paul Smeets on Social Preferences and Investor Loyalty

17-12-12 | Media - video |

In their paper, “Social Preferences and Investor Loyalty”, Rob Bauer and Paul Smeets show that social preferences are positively related to investor loyalty. They collected survey and experimental data from clients of two Dutch banks that offer socially responsible mutual funds and savings accounts. “We find that investors with strong social preferences are more loyal and generate substantially more revenue for these banks. This holds even after controlling for investment knowledge, risk aversion, wealth and gender. We show that the main driver of investor loyalty is social identification and not higher expected returns on SRI funds compared to conventional funds.” 

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