Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

Tarak Nath Sahu ¹, Arup Kumar Sarkar ², Krishna Dayal Pandey ³

Affiliations
1 Associate Professor, Department of Commerce, Vidyasagar University, Midnapore 721102, West Bengal, IN
2 Assistant Professor, Department of Commerce, Uluberia College, Howrah 711315, West Bengal, IN
3 Assistant Professor in Commerce, Directorate of Distance Education, Vidyasagar University, Midnapore 721102, West Bengal, IN

Abstract

The study examines how individual heterogeneity in respect of awareness and perceived risk attitude impacts the psychological biases like heuristics, prospects, markets and herding and thereby investment behaviour of retail investors. The study uses a structured questionnaire to collect direct responses from a sample of 450 retail investors from the state of West Bengal, India. It introduces Cronbach alpha for reliability test of the scale used, factor analysis including Kaiser-Meyer-Olkin (KMO) test to assess the relative importance of the factors considered under the variables, correlation coefficient and probit regression model to establish the relationship between the variables. The study finds awareness and perceived risk attitude to regulate one or the other psychological biases and thereby shape retail investor’s behaviour. The study provides important corollaries in the sense that it helps the stakeholders of the personal finance industry to critically understand the psychological interactions attached to the investment decisions of individual investors.

Keywords

No Keywords.

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