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Morals and Markets: The Case of Ethical Investing


This paper is a report of an empirical psychological study of the relationship between the ethical and financial beliefs and desires of ethical investors. Semi-structured interviews of 20 ethical investors have been carried out by the project 10 of which have been analysed using qualitative data analysis software. All of our participants faced the problem that, while they had ethical concerns, they were not prepared to sacrifice their essential financial requirements to address them. We found four common ways of dealing with this problem: they divided up their money into core and surplus accounts; they decided that it was enough to only be a partial ethical investor; they avoided detailed consideration of the costs of ethical investment; and they avoided rigorous ethical thinking. One equilibrium position arising from these responses is a portfolio approach to ethics, which allows people to assuage their consciences by investing only a small proportion of their investments ethically, while leaving the rest in non-ethical investment vehicles.

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J. Cullis ; A. Lewis ; and A. Winnett 1992. “Paying to be Good: UK Ethical Investment.” Kyklos 45, no. 1: 324.

A. Lewis and J. Cullis 1990. “Ethical investments: preferences and morality.” Journal of Behavioural Economics 19: 395441.

W. Samuelson and R. Zeckhauser 1988. “Status Quo Bias in Decision Making.” Journal of Risk and Uncertainty 1: 759.

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Business Ethics Quarterly
  • ISSN: 1052-150X
  • EISSN: 2153-3326
  • URL: /core/journals/business-ethics-quarterly
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