Willingness to Pay for Sustainable Funds: Does Reverse Labelling and Moral Appeals Increase Demand for Sustainable Investments?
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- Master Thesis 
This thesis seeks to determine if there is a willingness to pay for sustainable funds and if it is possible to influence the willingness to pay through a reverse label- and a moral treatment. The study also investigates the impact of the demographic factors age, gender, income, education, and knowledge. We study this topic by gathering data from an experimental survey sent to customers of Storebrand in Norway. The sample of 400 respondents is exposed to the treatments in a 2x2 between subject design. The willingness to pay is determined through a hypothetical question where the respondents are asked what they are willing to pay in management fee for a sustainable fund, and still prefer this over an otherwise comparable non-sustainable fund with a management fee of 1%. With standard labelling they are reporting their willingness to pay for “Global sustainable” compared to “Global”. With reverse labelling they are reporting their willingness to pay for “Global” compared to “Global non-sustainable”. The moral treatment consists of a moral text before the question of willingness to pay. The results suggest that there is a willingness to pay for sustainable funds, and that this willingness can be increased by exposing respondents to a combination of both treatments. Furthermore, the moral treatment is effective in increasing the probability of the respondents being willing to pay. In total, the number of respondents who had a willingness to pay for sustainable funds was 34% in the control group. This number increased to 49% for the groups who were exposed to a treatment. Receiving the combination of both treatments almost tripled the willingness to pay for sustainable funds as the average management fee people accepted went from 1.25% to 1.69%, an increase of 0.44 percentage points. The demographic factor of having a gross annual salary of more than 700,000 NOK is showed to have a negative correlation with willingness to pay for sustainable funds. However, gender, education, and knowledge were not significant, and neither was age when removing outliers.