Socially Responsible Investment versus Socially Responsible Consumption

To maximize their impact, socially responsible households can invest responsibly (SRI), consume (SRC), or do both. The key question of this paper is, which mix SRI and SRC leads to a desired impact with the lowest loss utility for households. In closed micro-economic model, we show that both strategies yield symmetric proportional behavior. For individual household, however, one strategy dominates other depending on condition risk product parameters. If coordinate action, welfare maximizing action is completely abstain from consuming investing in brown production if negative externality high. coordination abstaining becomes more likely are responsible.