Behavioural Factors Influencing Investment Decision Among Knowledge Workers in Bangalore

Abstract

Purpose: The purpose of the study is to understand the behavioural factors influencing investment decision among knowledge workers in Bangalore. Heuristics, Overconfidence, Herding and Gamblers fallacy are the four factors of interest in the current study.

Design / Methodology: The current study is a quantitative research based on primary data collected from Knowledge workers specifically the Doctors, Academicians , Engineers and BFSI employees.  Using the Kregcie-Morgan table for the calculation of sample size, a sample of 100 respondents at a 7.5% margin of error was considered. To account for non-responses, 120 questionnaires were distributed, and N= 99 responses were deemed suitable for the study. The sampling was done using convenience sampling. The questionnaire was also checked for its validity and reliability using the Gaskins master validity table. The AVE for all the four constructs was greater than 0.500, the Cronbach alpha and composite reliability were above 0.70. The discriminate validity was affirmed as the square root of AVE is greater than the interitem correlations.The Data interpretation was conducted using the  Factor analysis using SPSS and confirmatory factor analysis using AMOS software

Findings: The findings of the study show that there is a significant impact of Heuristics, Overconfidence, Herding and Gamblers fallacy in investment decisions. Representativeness exerted a notable influence on investment selections, it was imperative for investors to additionally take into account other variables such as risk tolerance and market analysis in order to make informed and prudent choices.

Originality:  The study's novelty stems from its examination of the behavioral aspects that impact investment decisions, with a specific emphasis on knowledge workers residing in Bangalore. Prior research has predominantly concentrated on examining investment decision-making among general populations or specific professional groups. The objective of this study is to address the existing research gap by investigating the distinct behavioral aspects that impact investment choices among knowledge workers in Bangalore, taking into account their specific attributes and preferences.

Implications: This study aims to enhance comprehension of investment behavior within this specific demographic and offer significant insights for financial advisors and policymakers to customize their tactics in order to meet the requirements and preferences of knowledge workers in Bangalore.