A Study of Investment Preferences and Risk Capacity of Salaried Households in Rajasthan

Abstract

This study investigates the investment preferences and risk-bearing capacity of salaried individuals in Rajasthan, with particular attention to the influence of socio-economic factors and financial literacy. Utilizing a simple random sampling technique, primary data were collected from 250 salaried households through a structured questionnaire, while secondary data were sourced from peer-reviewed journals, government reports, and academic publications. A mixed-methods approach, combining both quantitative and qualitative analysis was employed to ensure comprehensive insight into the behavioral and structural dimensions of investment decision-making. Descriptive statistics, including arithmetic mean and standard deviation, were used to summarize financial literacy and risk capacity levels across the sample. Pearson correlation and multiple linear regression analysis were conducted using SPSS and Microsoft Excel to test the proposed hypotheses. The results revealed that socio-economic factors, specifically economic status, social influence, and risk appetite, significantly influenced investment preferences (R² = 0.357, p < 0.001), with risk appetite emerging as the most influential predictor. Furthermore, the study identified a moderate and statistically significant positive correlation between financial literacy and risk capacity (r = 0.512, p < 0.001), indicating that individuals with higher financial knowledge are more capable of managing investment-related risks. The findings underscore the critical role of both financial literacy and risk orientation in shaping investment behavior, with implications for financial education policies and investor advisory services targeting the salaried demographic.