Does Demographic Profile Create a Difference in the Investor Behavior?

Abstract

Behavioral finance proposes psychology based theories and in depth study on stock market anomalies. The information structure and the characteristics of market participants systematically influence individuals' investment decisions as well as market outcomes. The paper investigates how demographic profile creates a difference in the investor behavior. For the purpose of the study, data are collected from 110 respondents from various financial broking services and individual investor's. Descriptive analysis, Factor analysis and Anova, are the statistical tools used for the analysis. The results indicate that investor behavior is subject to Representativeness, Conservatism, Regret Aversion, Price Anchoring and Overconfidence factors.  The major findings take into account that behavioral factors like Representativeness and Overconfidence are ranked with highest mean score followed by Conservatism, Price Anchoring and Regret Aversion. Apart from these biases, on the basis of demographic variables, it is found that gender, age, education and experience have an interaction with behavioral factors in investment decisions.