N°24-46: Climate Change and Bank Deposits

Abnormally warm temperatures are associated with an increase in people’s beliefs about climate change. Using branch-level deposit data from the United States, we find that depositors move their money away from fossil-fuel-financing banks when they experience warmer-than-usual temperatures. The reallocation of deposits is mainly due to prosocial motives rather than financial preferences. Our results shed light on people’s responses to the impacts of global warming by studying the relationship between households’ beliefs about climate change and their social preferences in their choice of bank for deposits.