Title

How much does it take to make your heart feel good? An attempt to quantify compassion in sustainable stock prices.

Lead Author Major

BS Applied Economics & BSBA Economics & Finance

Lead Author Status

Junior

Format

Oral Presentation

Faculty Mentor Name

Ben Carlston

Faculty Mentor Email

bcarlston@pacific.edu

Faculty Mentor Department

Finance

Abstract/Artist Statement

A recent surge in sustainability has occurred in the world today. Business’ are attempting to play their part by “going green.” Many consumers, like you and me, are often tasked with a tough decision; “Do I pay that premium to purchase an environmentally sustainable and ethically produced product or service?” Research shows that yes, most consumers are both willing and able to pay a premium for trying to help the world preserve its resources. In this research, I would like to quantify this premium by using hedonic valuation.

Hedonic price theory claims consumers treat goods as a collection of distinguishing characteristics. One such criterion is a firm’s commitment to “going green.” By comparing financial metrics of firms that are green (Northface, Patagonia, etc), I will attempt to derive the “compassion premium” from the variation in the stock market. The data will be from the Bloomberg Terminal as I am involved in the ESB Student Investment Fund.

The goal of this project will be to educate the community of the impact of sustainable investing, or the ability to profit off investments that are transparent in their ethics, values, and environmental footprint. The audience will gain new insight to “green” firms, business ethics, and investing.

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How much does it take to make your heart feel good? An attempt to quantify compassion in sustainable stock prices.

A recent surge in sustainability has occurred in the world today. Business’ are attempting to play their part by “going green.” Many consumers, like you and me, are often tasked with a tough decision; “Do I pay that premium to purchase an environmentally sustainable and ethically produced product or service?” Research shows that yes, most consumers are both willing and able to pay a premium for trying to help the world preserve its resources. In this research, I would like to quantify this premium by using hedonic valuation.

Hedonic price theory claims consumers treat goods as a collection of distinguishing characteristics. One such criterion is a firm’s commitment to “going green.” By comparing financial metrics of firms that are green (Northface, Patagonia, etc), I will attempt to derive the “compassion premium” from the variation in the stock market. The data will be from the Bloomberg Terminal as I am involved in the ESB Student Investment Fund.

The goal of this project will be to educate the community of the impact of sustainable investing, or the ability to profit off investments that are transparent in their ethics, values, and environmental footprint. The audience will gain new insight to “green” firms, business ethics, and investing.