Revealed Preferences of Household and Corporate Investors for Socially Responsible Investment in Bangladesh

Abstract

Socially Responsible Investment (SRI) is an investment strategy that brings private profit as well as social benefits. It has gained world-wide popularity in the last few years. The present paper provides a literature review on various aspects of SRI and then attempts to analyze the revealed or divulged preferences of some corporate entities and a panel of individual private or household investors for socially responsible investments (SRI) in the present context of Bangladesh. For this purpose, 30 corporate bodies and 300 individual private investors (household investors) have been chosen conveniently as respondents to learn whether they would be interested to invest in socially responsible investment projects or investment vehicles such as mutual funds, if these were made available in Bangladesh. Based on their responses, the paper finds that there is a strong demand for SRI products among the private/household investors at returns slightly (1%) less than the traditional private returns. The study finds that nowadays individual investors agree to sacrifice a part of their private benefits for social returns. However, the corporate organizations do not prefer SRI. The study also finds that among the household investors relatively women prefer SRI more than the men. However, the price of taste for Socially Responsible Investment is very low.