Investors personality correlates with sustainability preferences in investment – A choice experiment with Spanish investors

Abstract

According to behavioral economics, investors’ decisions are influenced by factors beyond rational reasoning, such as an investor's personality. This paper explores the relationships between personality, using the Big Five personality traits framework, and the willingness to invest in assets that contribute to achieving sustainable development goals (SDGs), more specifically, sustainable finances. The study also analyzes the relationship between personality traits and risk aversion. To this end, 1,357 investors in Spain were surveyed through an online questionnaire combining a choice experiment and a personality assessment. The main conclusion of our study is that personality traits are associated with the characteristics of investment products preferred by the sampled investors.. This relationship is quantified through the analysis of a willingness to pay (WTP) for various investment attributes. While all personality traits are linked to risk aversion and a willingness to invest in sustainable companies, our WTP analysis highlights differences in the extent to which investors are willing to forgo profitability to contribute to the SDGs. Although we find heterogeneous behavior among investors, the agreeableness trait emerges as the most concerned with sustainability.