Journal of Business Ethics

, Volume 93, Issue 2, pp 237–253 | Cite as

It’s a Matter of Principle: The Role of Personal Values in Investment Decisions



We investigate the role of personal values in an investment decision in a controlled experimental setting. Participants were asked to choose an investment in a bond issued by a tobacco company or a bond issued by a non-tobacco company that offered an equal or sometimes lower yield. We then surveyed the participants regarding their feelings toward tobacco use to determine whether these values influenced their investment decision. Using factor analysis, we identified investment- and tobacco-related dimensions on which participants’ responses tended to load. Two of these factors, relating to the societal impact of investment decisions and the health effects of tobacco, were highly significant in determining whether participants selected a tobacco or non-tobacco related investment. More importantly, we found that when the rate of return on a tobacco-related investment exceeds the rate of return on an investment not involving tobacco by 1%, the intensity of participant concerns about the societal effects of their investment decisions was especially important in determining investment choices. This finding indicates that traditional wealth-maximization approaches, which do not consider the personal values of the investor, omit an important factor that affects investment decisions.

Key words

investment personal values socially responsible investing 


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Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  1. 1.Texas Tech UniversityLubbockU.S.A.
  2. 2.Northern Illinois UniversityDeKalbU.S.A.

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