Financial Returns Versus Moral Concerns: Laypeople’s Willingness to Engage in Fair Investments

Both household consumption and savings behavior are increasingly influenced by fairness concerns. Although justice research has repeatedly investigated consumers’ ethical consumption, research on laypeople’s (i.e., non-experts’) ethical investment behavior has received far less attention. Across four studies, we find that—on average—people are willing to accept lower interest rates for an increased ethicality of their financial investments, which suggests that fairness concerns are taken into account when making investment decisions. We find that investments with higher fairness must yield an overall lower return to be preferred over a secure fixed-income fund compared to more immoral investments (Study 1). Furthermore, laypeople prefer fairer funds in direct comparison (Study 2), an effect that cannot be solely attributed to people’s general tendency to underestimate dynamic interest rate effects (Study 3). Finally, we explored the potential psychological processes that could underlie this average preference for moral investments and find that harm/care and fairness moral foundations moderate the effect (Study 4). We find that perceptions of fairness mediate the link, but perceptions of risk do not. The results provide consistent support for fairness concerns in laypeople’s financial decision making, similar to what has been found in ethical consumption.