Behavioral Biases Towards Investment Decisions on Demographic Characteristics

Dr. E. Muthukumar, Dr. P. Krishnakumar

Abstract: The research on investor behaviour takes into account of the irrational behaviour of investors, which fluctuates under the influence of various subjective factors. Hence, this study covers the influence of behavioural factors on Investment decisions. This study explored the relationship between demographics characteristics, behavioural biases and investment decisions for individual investors in India. By using questionnaire survey method conducted in 2024, there are 355 valid convenient samples collected to examine the determinants of seven types of behavioral biases Based on literature review, two hypothesized models are constructed and further used to evaluate the effects of demographic variables on behavioural biases and their investment decisions through Structural Equation Model (SEM) analysis. The results showed that among the demographic factors, gender and education have a negative significant influence and age of retail investors has positive significant influence on the investment behavioural biases. It is noted that market, economic, risk, cognitive and attitude are highly significant and herding factor has significant influence on the behavioural factors on investment decisions of retail investors. The model altogether explains 66 percent of the behavioural biases that influences the investment decisions of retail investors.

Keywords: Investment behaviour, behavioural bias, demographic characteristics, Investment decision