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Behavioral biases and investors’ decision-making: The moderating role of socio-demographic variables

Author

Listed:
  • Naveeda K. Katper

    (Institute of Business Administration, University of Sindh, Jamshoro, Sindh, Pakistan)

  • Muhammad Azam

    (#x2020;Faculty of Management Sciences, Iqra University, Karachi 75500, Sindh, Pakistan)

  • Nazima Abdul Karim

    (#x2021;Department of Business Administration, Iqra University, Karachi 75500, Sindh, Pakistan)

  • Syeda Zinnaira Zia

    (#x2021;Department of Business Administration, Iqra University, Karachi 75500, Sindh, Pakistan)

Abstract

The purpose of this study is to investigate the impact of behavioral biases on investment decision, and the interaction effect of socio-demographic characteristics. Data were collected from a sample of 179 individual investors in the Pakistan Stock Exchange (PSX). The authors conducted a hierarchical regression analysis to test the moderating effect of socio-demographic variables on behavioral biases. The results show that behavioral biases have a significant impact on investors’ decision-making. Moreover, socio-demographic variables (education, occupation and marital status) moderate the relationship between emotional biases and investors’ decision-making. This study provides a new addition to prior literature by investigating the impact of behavioral biases on investors’ decision-making, and the interaction effect of socio-demographic characteristics.

Suggested Citation

  • Naveeda K. Katper & Muhammad Azam & Nazima Abdul Karim & Syeda Zinnaira Zia, 2019. "Behavioral biases and investors’ decision-making: The moderating role of socio-demographic variables," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 1-15, September.
    • Handle: RePEc:wsi:ijfexx:v:06:y:2019:i:03:n:s2424786319500208
    DOI: 10.1142/S2424786319500208
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    References listed on IDEAS

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    2. Zheng, Xiaotian & Zhou, Youcheng & Iqbal, Sajid, 2022. "Working capital management of SMEs in COVID-19: role of managerial personality traits and overconfidence behavior," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 439-451.

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