Why do Crowdinvestors invest? Survey and decision experiment
Last registered on July 20, 2021

Pre-Trial

Trial Information
General Information
Title
Why do Crowdinvestors invest? Survey and decision experiment
RCT ID
AEARCTR-0007597
Initial registration date
April 22, 2021
Last updated
July 20, 2021 11:45 AM EDT
Location(s)
Region
Primary Investigator
Affiliation
University of Essex
Other Primary Investigator(s)
PI Affiliation
University of Bremen
Additional Trial Information
Status
Completed
Start date
2021-04-26
End date
2021-05-31
Secondary IDs
Abstract
We run a field experiment / lab in the field experiment (online) with crowdfunders. The survey part of the experiment is asking for the reasons why investors use crowdfunding, rather than alternatives such as stocks, funds etc. The survey also elicits various demographics and risk and time preferences.

In an incentivized choice experiment, we then elicit data to determine why crowdfunders in particular invest in green projects. For details, see the attached document.

Subjects are randomized into a condition that completes the experiment first, or another condition that completes the survey first.
External Link(s)
Registration Citation
Citation
Hornuf, Lars and Christoph Siemroth. 2021. "Why do Crowdinvestors invest? Survey and decision experiment." AEA RCT Registry. July 20. https://doi.org/10.1257/rct.7597-2.0.
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2021-04-26
Intervention End Date
2021-05-31
Primary Outcomes
Primary Outcomes (end points)
The key choice in the experiment is that between a 25 Euro voucher and a donation to one of 3 organisations g. We determine the willingness to accept the donation over the voucher via a BDM procedure. Thus, for every subject, we elicit WTA_g. The organisations are a carbon offset company, Greenpeace, and the Red Cross.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
See the attached pre-analysis plan.
Experimental Design Details
We will recruit active crowdfunders from the platform via email newsletters. The platform is sending regular newsletters, and has conducted a survey of its own before, so this is not unusual.

Subjects will go through a survey and a choice experiment. The order of these two elements is randomized at subject level. The core of the experiment is to elicit a willingness to accept a donation to one of 3 causes (two environmental, one social) over a 25 Euro voucher, which can be used on the homerocket crowdfunding platform. This choice is incentivized, as we will actually give subjects the voucher or make the donation on their behalf, according to their choice.

Since the voucher can only be invested in real estate projects, but not in green projects, the choice between the voucher (similar to cash or higher returns) or the green or social causes tells us what subjects truly care about in an incentivized way.

The donations go to one of three organisations: carbonoffset.com, Greenpeace, or the Red Cross Austria. The first two achieve environmental impact, the last achieves social impact. Thus, if subjects give up the voucher to let us make these donation, then this reveals their preference for environmental or social impact.

As we describe in the pre-analysis plan, these elicited willingnesses to pay then help us determine whether investors invest in green projects for their higher expected returns, their environmental impact, or their social impact.
Randomization Method
Randomization is determined by qualtrics' random number procedure.
Randomization Unit
Subject
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
We aim for 400 completed surveys/experiments, and will send out email newsletter invitations until we reach this number.

We might get slightly more than 400, as qualtrics allows subjects who have started the survey to finish it. Thus, once we stop accepting new responses at 400, those who have already started can still finish.
Sample size: planned number of observations
400 subjects.
Sample size (or number of clusters) by treatment arms
400 subjects.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Ethics Sub Committee 3 of University of Essex
IRB Approval Date
2021-04-09
IRB Approval Number
ETH2021-0924
Analysis Plan

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Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
Yes
Intervention Completion Date
May 03, 2021, 12:00 AM +00:00
Is data collection complete?
Yes
Data Collection Completion Date
May 03, 2021, 12:00 AM +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
399 crowdfunders
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
399 crowdfunders
Final Sample Size (or Number of Clusters) by Treatment Arms
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
No
Reports, Papers & Other Materials
Relevant Paper(s)
Abstract
Are investors willing to give up a higher return if the investment generates positive environmental impact? We investigate this question with a decision experiment among crowdfunders, where they choose between a higher return or environmental impact. Overall, 65% of investors choose environmental impact at the expense of a higher return for sufficiently large impact, 14% choose impact independent of the magnitude of impact, while 21% choose the higher return independent of impact. Combining the experimental data with historical investments, we find that investors allocate a larger share of funds to green projects if they value environmental impact more, and if they expect green projects to be more profitable. These findings suggest that investors have a preference for positive environmental impact, and satisfy it by investing in green projects. We further show that the preference for environmental impact is distinct from a preference for positive social impact. Finally, we introduce new survey measures of impact for future use, which are experimentally validated and predict field behavior.
Citation
Siemroth, Christoph and Hornuf, Lars, Do retail investors value environmental impact? A lab-in-the-field experiment with crowdfunders (July 14, 2021). Available at SSRN: https://ssrn.com/abstract=3888258
REPORTS & OTHER MATERIALS