Drivers of Investment Behaviour among Individual Investors in India

Abstract

Various psychological, demographic, and sociological factors have been studied explaining investment decisions among Indian retail investors. A quantitative cross-sectional explanatory survey design was used to collect data through online questionnaires administered on-site to respondents at malls / retail distributors in Indian metro cities and Tier-I states. The questionnaire was displayed on the counter of different brokerage houses for the participants to fill in. Descriptive analysis was achieved using IBM SPSS on 386 valid reflections of the survey among the participants. The tool used for data collection was highly reliable, with Cronbach's alpha values of greater than the required 0.70. The researchers evaluated their hypotheses through descriptive and exploratory factor analysis, Pearson correlation analyses, and multiple regressions. Again, reliability testing, correlation analysis, and multiple regression techniques were used to reach answers to the investigation queries. The study's major finding is that psychological variables such as investment knowledge and degree of risk aversion have a significant effect on the chance of investment, and the sociological variables such as revenue and education are significantly less influential than the former variables and are directly next in line. Moreover, the demographic variables such as age and sex have marked effects on the investment behaviour of investors. This project will certainly lay some academic footing for many other new or existing supplements in this area. This will immensely help financial planners and policy-makers to draw on the practical knowledge and guidance for the investment public to make better investment choices.