IDEAS home Printed from https://ideas.repec.org/a/wly/sustdv/v33y2025is1p704-719.html

Is Nudging Effective in Promoting Blue Bond Investment? Evidence From Japanese Retail Investors

Author

Listed:
  • Kentaka Aruga
  • Md. Monirul Islam
  • Arifa Jannat

Abstract

This study examines how behavioral nudges influence Japanese retail investors' willingness to invest in blue bonds (BBs) denominated in JPY and USD. Using the MINDSPACE framework, which identifies nine key nudges, the study applies the double‐bounded dichotomous choice contingent valuation method (DBDC‐CVM) to assess willingness to invest at different interest rate levels. Data were collected from 1215 investors via an online survey in August 2023. The findings indicate that the messenger and priming nudges lowered the required interest rate for JPY‐denominated BBs, while the other seven nudges had no significant effect. Ensemble machine learning confirmed the importance of these two nudges. Additionally, none of the nudging components influenced investment in USD‐denominated BBs, suggesting that when returns are high, behavioral nudges lose their effectiveness. These results provide insights into the role of behavioral interventions in sustainable finance and highlight the limitations of nudging in shaping investment decisions.

Suggested Citation

  • Kentaka Aruga & Md. Monirul Islam & Arifa Jannat, 2025. "Is Nudging Effective in Promoting Blue Bond Investment? Evidence From Japanese Retail Investors," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(S1), pages 704-719, November.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:s1:p:704-719
    DOI: 10.1002/sd.70028
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/sd.70028
    Download Restriction: no
    File URL: https://libkey.io/10.1002/sd.70028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pieter Bosmans & Frederic de Mariz, 2023. "The Blue Bond Market: A Catalyst for Ocean and Water Financing," JRFM, MDPI, vol. 16(3), pages 1-48, March.
    2. Loomis, John & Kent, Paula & Strange, Liz & Fausch, Kurt & Covich, Alan, 2000. "Measuring the total economic value of restoring ecosystem services in an impaired river basin: results from a contingent valuation survey," Ecological Economics, Elsevier, vol. 33(1), pages 103-117, April.
    3. Honjo, Yuji & Ikeuchi, Kenta & Nakamura, Hiroki, 2024. "Does risk aversion affect individuals’ interests and actions in angel investing? Empirical evidence from Japan," Japan and the World Economy, Elsevier, vol. 70(C).
    4. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    5. Kim, Somyung & Ohk, Kiyool, 2025. "Regret aversion in Japanese and U.S. stock markets: Analyzing the effects of market conditions," Japan and the World Economy, Elsevier, vol. 74(C).
    6. Kentaka Aruga, 2020. "Radiation knowledge and willingness to buy bottled water from regions near the Fukushima Daiichi Nuclear Power Plant," Water International, Taylor & Francis Journals, vol. 45(7-8), pages 812-823, November.
    7. Amisha Gupta & Shumalini Goswami, 2024. "Behavioral perspective on sustainable finance: nudging investors toward SRI," Asian Journal of Economics and Banking, Emerald Group Publishing Limited, vol. 8(3), pages 366-390, June.
    8. Kentaka Aruga, 2025. "Are retail investors willing to buy green bonds? A case for Japan," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 15(2), pages 388-402, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bandara, Ranjith & Tisdell, Clement A., 2002. "Willingness to Pay for Conservation of the Asian Elephant in Sri Lanka: A Contingent Valuation Study," Economics, Ecology and Environment Working Papers 48738, University of Queensland, School of Economics.
    2. Ndebele, Tom & Forgie, Vicky, 2017. "Estimating the economic benefits of a wetland restoration programme in New Zealand: A contingent valuation approach," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 75-89.
    3. Zhaoyi Shang & Yue Che & Kai Yang & Yu Jiang, 2012. "Assessing Local Communities’ Willingness to Pay for River Network Protection: A Contingent Valuation Study of Shanghai, China," IJERPH, MDPI, vol. 9(11), pages 1-17, October.
    4. Graça, Manjate, 2018. "Scope effects in contingent valuation: an application to the valuation of irrigation water quality improvements in Infulene Valley, Mozambique," Research Theses 334752, Collaborative Masters Program in Agricultural and Applied Economics.
    5. Bandara, Ranjith & Tisdell, Clem, 2004. "The net benefit of saving the Asian elephant: a policy and contingent valuation study," Ecological Economics, Elsevier, vol. 48(1), pages 93-107, January.
    6. Bandara, Ranjith & Tisdell, Clement A., 2003. "Use and non-use values of wild Asian elephants: A total economic valuation approach," Economics, Ecology and Environment Working Papers 48961, University of Queensland, School of Economics.
    7. Holmes, Thomas P. & Bergstrom, John C. & Huszar, Eric & Kask, Susan B. & Orr, Fritz, III, 2002. "Estimating The Local Economic Benefits Of Riparian Ecosystem Restoration Using Iterated Contingent Valuation," Faculty Series 16696, University of Georgia, Department of Agricultural and Applied Economics.
    8. Jagannadha R. Matta & Janaki R. R. Alavalapati & D. Evan Mercer, 2009. "Incentives for Biodiversity Conservation Beyond the Best Management Practices: Are Forestland Owners Interested?," Land Economics, University of Wisconsin Press, vol. 85(1), pages 132-143.
    9. Cho, Seong-Hoon & Yen, Steven T. & Bowker, J.M. & Newman, David H., 2008. "Modeling Willingness to Pay for Land Conservation Easements: Treatment of Zero and Protest Bids and Application and Policy Implications," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 267-285, April.
    10. Hao Li & Xiaohui Yang & Xiao Zhang & Yuyan Liu & Kebin Zhang, 2018. "Estimation of Rural Households’ Willingness to Accept Two PES Programs and Their Service Valuation in the Miyun Reservoir Catchment, China," Sustainability, MDPI, vol. 10(1), pages 1-19, January.
    11. Holmes, Thomas P. & Bergstrom, John C. & Huszar, Eric & Kask, Susan B. & Orr, Fritz III, 2004. "Contingent valuation, net marginal benefits, and the scale of riparian ecosystem restoration," Ecological Economics, Elsevier, vol. 49(1), pages 19-30, May.
    12. Bandara, Ranjith & Tisdell, Clement A., 2003. "Willingness of Sri Lankan Farmers to pay for a Scheme to Conserve Elephants: An Empirical Analysis," Economics, Ecology and Environment Working Papers 48954, University of Queensland, School of Economics.
    13. Eugenio Figueroa & Roberto Pasten, 2014. "Economically valuing nature resources to promote conservation: An empirical application to Chile's national system of protected areas," Papers in Regional Science, Wiley Blackwell, vol. 93(4), pages 865-888, November.
    14. Holmes, Thomas P. & Bergstrom, John C. & Huszar, Eric & Kask, Susan B. & Orr, Fritz, III, 2002. "Estimating The Local Economic Benefits Of Riparian Ecosystem Restoration Using Iterated Contingent Valuation," Faculty Series 16696, University of Georgia, Department of Agricultural and Applied Economics.
    15. Chiara D’Alpaos & Paolo Bragolusi, 2020. "The Market Price Premium for Buildings Seismic Retrofitting," Sustainability, MDPI, vol. 12(21), pages 1-20, October.
    16. Shrestha, Ram K. & Alavalapati, Janaki R. R., 2004. "Valuing environmental benefits of silvopasture practice: a case study of the Lake Okeechobee watershed in Florida," Ecological Economics, Elsevier, vol. 49(3), pages 349-359, July.
    17. Gianluca Grilli & John Curtis & Stephen Hynes, 2020. "Modelling anglers' fish release choices using logbook data," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 9(2), pages 206-219, April.
    18. Halkos, George, 2013. "The relationship between people’s attitude and willingness to pay for river conservation," MPRA Paper 50560, University Library of Munich, Germany.
    19. Jin, Jianjun & Indab, Anabeth & Nabangchang, Orapan & Thuy, Truong Dang & Harder, Dieldre & Subade, Rodelio F., 2010. "Valuing marine turtle conservation: A cross-country study in Asian cities," Ecological Economics, Elsevier, vol. 69(10), pages 2020-2026, August.
    20. Halkos, George & Matsiori, Steriani, 2014. "Exploring social attitude and willingness to pay for water resources conservation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 49(C), pages 54-62.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:sustdv:v:33:y:2025:i:s1:p:704-719. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-1719 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.