Pricing of Green Labeling: A Comparison of Labeled and Unlabeled Green Bonds

This is the first study to empirically tests a price difference between labeled and unlabeled green bonds and to identify which factors contribute to any price difference although both bonds may eventually be used to fund environmentally beneficial projects. We study the effect of the green label, focusing on especially the yield of labeled and unlabeled green bonds after propensity score matching. We find that unlabeled green bonds are likely to have higher yields, despite unlabeled and labeled green bonds having the same characteristics.

Automated summary

The study found that unlabeled green bonds are likely to have higher yields, despite unlabeled and labeled green bonds having the same characteristics.