Exploring the Interplay of Economic, Social, Psychological, and Demographic Variables on Behavioral Biases in Investment Decision-Making: A Study of Public Bank Customers

Abstract

Investor’s irrationality is an inevitable reality that has been time and again highlighted by researchers (Statman, 2008). Therefore, this study is another effort to explore the Interplay of Economic, Social, Psychological, and Demographic Variables on Behavioral Biases in Investment decision making in Public Sector Banks. This study used an auto structured questionnaire to gather primary data from sample of 300 bank investors. Descriptive sampling approach and Purposive sampling technique was applied. Many factors are present, which affects the investment decisions and investment pattern; it includes various determinants like demographic factors consisting age, gender, income, education, etc. Financial determinants include corporate earnings, financial position, dividend paid etc. Market determinants include consumer preferences, market information. Risk bearing determinants include consistency of safety, Liquidity, capital appreciation, return and risk coverage, etc. Along with these behavioral determinants  are also going to be affected .One sample statistics, T test, ANOVA is used to test influence of Economic, Social, Psychological, and Demographic Variables on Behavioral Biases in Investment decision making. The results show that all have significant positive impact on investment decision. Overall results conclude that much change in investment decision is due to interplay of variables on behavioral biases. This study will help financial advisors to better advice their clients.