Does financial literacy alleviate risk attitude and risk behavior inconsistency?

2021 ◽  
Author(s):  
Aslihan Gizem Korkmaz ◽  
Zhichao Yin ◽  
Pengpeng Yue ◽  
Haigang Zhou
Keyword(s):  
Risk Behavior ◽  
Financial Literacy ◽  
Risk Attitude

scholarly journals EFFECT OF FINANCIAL LITERACY, RISK ATTITUDE AND SAVING MOTIVES TO DISPOSITION BIAS ON MUTUAL FUNDS INVESTORS

2021 ◽  
Vol 2 (1) ◽  
pp. 27-33
Author(s):  
Jennifer Saputra ◽  
Dewi Astuti ◽  
Dewi Pertiwi
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Financial Literacy ◽  
Investment Decision ◽  
Risk Attitude ◽  
Binary Logistic Regression ◽  
Human Needs ◽  
Investment Decision Making ◽  
Considerable Impact ◽  
Spss Software

Investment is significant to prepare human needs in the future. To make investment decisions, investors will try to make their decisions as rationally as possible. However, one cannot deny that some irrational factors or biases also influence investment decision-making. This study examines financial literacy, risk attitude, and saving motives on disposition bias of mutual fund investors. The sample used is mutual fund investors, and the respondents themselves make decisions to sell or buy mutual funds. The total of respondents is 116 respondents. The regression method used in this study is binary logistic regression using SPSS software. This study found that financial literacy and risk attitude has a significant effect on disposition bias. Meanwhile, the variable saving motives have no considerable impact on disposition bias.

scholarly journals Risk Behavior of Farmers Cultivating Traditional Rice Varieties in Erode District, Tamil Nadu

2021 ◽  
pp. 349-357
Author(s):  
G. Kaviya ◽  
A. Vidhyavathi ◽  
S. Padma Rani ◽  
M. Nirmala Devi
Keyword(s):  
Risk Behavior ◽  
Tamil Nadu ◽  
Rice Variety ◽  
Soil Health ◽  
Risk Attitude ◽  
Farm Income ◽  
Rice Varieties ◽  
Natural Risk ◽  
Small Areas ◽  
Traditional Rice

This study investigates the risk behavior of traditional rice variety growers in Erode District of Tamil Nadu state, using Moscardi and De Janvry approach and Discriminant analysis technique. A well structured questioner was prepared and purposive random sampling was done in three blocks which covers highest cultivable area under paddy namely Gobichettipalayam, Modakurichi and Bhavani in Erode district. Each traditional rice varieties have some unique characteristics i.e some are pest and disease resistant, drought resistant, resistant to waterlogged condition and have medicinal values. The present study was done to identify the major risks, to quantify the risk attitude and to identify the factors influencing risk attitude of the traditional variety growers in Erode District. In the research it was found that the varieties preferred by farmers were Thuyamalli, Kichadi samba, Karuppukavuni, Mapillai samba,Arcaud Kichadi Samba, Poongar, Thanga Samba, Sivan Samba and few other varieties they were cultivating in small areas using organic farming method.The major risk found in cultivating traditional rice varieties were market risk followed by human labour risk, processing risk, input risk, technology risk, institutional risk, natural risk and other risks include transport risk and storage risk. The farmers were grouped into three categories i.e., risk preferrers (63.33 per cent), risk neutral (28.33 per cent) and risk averse (8.33 per cent) based on risk attitude. Once again the farmers in each group was categorized into low, medium, high risk based on nine factors namely, farmers age, major occupation, years of schooling, family size, membership in any of the farmers association, proportion of paddy area to total farm area, proportion of paddy income to total farm income, experience and adequacy of market which were influencing the risk attitude of farmers. In order to conserve the traditional rice varieties from extinction, to restore the soil health, to ensure nutritional security the farmers were willing to take risk.

scholarly journals EFFECT OF FINANCIAL LITERACY AND RISK ATTITUDE ON INVESTOR BEHAVIOR

2021 ◽  
Vol 6 (2) ◽  
Author(s):  
Livia Della Ramandhanty ◽  
Alfiyatul Qomariyah S.Ak., M.BA., Ph.D., ◽  
Fatih Andesita Wuri Bemby
Keyword(s):  
Capital Market ◽  
Financial Literacy ◽  
Structural Equation ◽  
Sampling Method ◽  
Investment Decisions ◽  
Risk Attitude ◽  
Research Data ◽  
Investor Behavior ◽  
Investment Risk ◽  
Equation Modelling

This research aims to examine the related effects of financial literacy and risk attitudes towards investor behavior in the Indonesian capital market with the motive of saving as a mediating variable. This study uses a quantitative approach and partial least squares- structural equation modelling (PLS-SEM) to test hypotheses. The research data was obtained from 110 questionnaires distributed to capital market investors in Indonesia using the purposive sampling method. The results of this study indicate that financial literacy, risk attitude and saving motives have positive and significant effects on investor behavior in the Indonesian capital market. The influence of financial literacy and risk attitude also has a positive and significant effect on saving motives. However, the motive for saving money cannot mediate the effect of financial literacy and risk attitude on investor behavior. Theoretically, the implications of the results of this study are the level of financial literacy, risk attitude, and saving motives can directly influence investor behavior. The higher the financial literacy, the better the attitude in facing investment risk and the greater the motive for saving, the better the investor's behavior in making investment decisions. Whereas in practical terms, this implication is used as input for investors to further increase financial literacy, pay attention to the level of risk of selected investments, and enlarge the motives for saving so that the purpose of investing can be achieved well.

An investigation of the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias

2017 ◽  
Vol 43 (3) ◽  
pp. 282-298 ◽  
Author(s):  
Sara Jonsson ◽  
Inga-Lill Söderberg ◽  
Mats Wilhelmsson
Keyword(s):  
Interest Rates ◽  
Mutual Fund ◽  
Financial Literacy ◽  
Risk Attitude ◽  
Individual Characteristics ◽  
Disposition Effect ◽  
Content Type ◽  
Fine Grained ◽  
Separate Model ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias. Specifically, the authors focus on individual characteristics explaining the investors’ propensity to sell shares in a poorly performing mutual fund. Design/methodology/approach The study relies on survey data collected from 1,564 Swedish households in 2013. The authors test the hypotheses considering three different portfolio compositions and portfolio performances. Each composition corresponds to a dependent variable and a separate model which are estimated using ordinal logistic regression. Findings The authors find that different forms of financial literacy affect attenuation of the disposition effect. Specifically, the authors find that knowledge about mutual funds and knowledge about current market conditions affect the attenuation of the disposition effect, whereas the authors find no support for the effect of “technical financial knowledge” (e.g. the ability to calculate compound interest rates). The authors also find no support for the effects of risk attitude and saving motives on the attenuation of the disposition bias. Originality/value The findings suggest a need for a more fine-grained conceptualization of the financial literacy concept and its effect on investors’ disposition bias. Since an important implication of the findings is that financial literacy could potentially help people overcome behavioral bias, the study provides insights for policymakers as well as into the discussion on the design of consumer education programs.

scholarly journals INVESTMENT DECISION MAKING TOWARDS INVESTING IN ISLAMIC UNIT TRUSTS AMONGST WOMEN

2021 ◽  
Vol 16 (Number 1) ◽  
pp. 43-54
Author(s):  
Nor Izzati Mohd Aziz ◽  
Salina Kassim
Keyword(s):  
Financial Literacy ◽  
Investment Decision ◽  
Risk Attitude ◽  
Sampling Technique ◽  
Men And Women ◽  
Financial Investment ◽  
Self Confidence ◽  
Investment Decision Making ◽  
Investment Volume ◽  
Unit Trust

The differences in skill expectations and knowledge are amongst factors that contribute to the variances when men and women choose financial products. Women are claimed to be risk averse, somewhat insecure, lacking self-confidence and interest in financial investment products. Nevertheless, the evolving working and educational environment has changed this stereotype, wherein women are increasingly more educated, knowledgeable, and are more exposed to investments. Gender equality between men and women in terms of the volume of investments has turned into a requirement that boosts economic growth with people being the most important factor to contribute through investing habit. This cannot be realised if only men are involved in investment. Financial institutions aim certain figures of targeted investment volume each year. As such, this study identified the factors of women investments, particularly in Islamic unit trusts. A total of 201 respondents were selected via the convenience sampling technique. The Likert scale questionnaires were analysed using SMART PLS software. As a result, several investment behaviours, including investment objectives, return expectations, awareness, and risk attitude, emerged as factors that influenced women investors to choose unit trusts. The study outcomes are beneficial in devising effective strategies that may attract women to invest in Islamic unit trust. Besides, certain agencies should conduct campaigns or seminars on financial literacy for this potential sector, so as to enhance their knowledge in investing in Islamic unit trusts.

scholarly journals THE INFLUENCE OF DEMOGRAPHY, SOCIAL MEDIA, RISK ATTITUDE, AND OVERCONFIDENCE ON THE FINANCIAL LITERACY OF USERS SOCIAL MEDIA IN SURABAYA

2021 ◽  
Vol 2 (1) ◽  
pp. 10-19
Author(s):  
Rizon Rizon ◽  
Njo Anastasia ◽  
Evelyn Evelyn
Keyword(s):  
Social Media ◽  
Data Analysis ◽  
Financial Literacy ◽  
Risk Attitude ◽  
Test Results ◽  
Analysis Method ◽  
Online Questionnaire ◽  
Data Analysis Method

This study aims to examine the influence of demography, social media, risk attitude, and overconfidence on the financial literacy of users of social media in Surabaya. The sample used in this study amounted to 300 respondents. Data were collected using a online questionnaire via Google Form. The data analysis method used in this study is PLS. The analysis test results show that there is an effect of demography, social media, risk attitude, and overconfidence on users' financial literacy in Surabaya.

A Cambodian smallholder farmer's choice between microfinance institutes and informal commercial moneylenders: the role of risk attitude

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Annkathrin Possner ◽  
Selina Bruns ◽  
Oliver Musshoff
Keyword(s):  
Financial Literacy ◽  
Financial Services ◽  
Smallholder Farmers ◽  
Risk Attitude ◽  
Multinomial Logit Model ◽  
Individual Risk ◽  
Risk Averse ◽  
Content Type ◽  
Microfinance Institution ◽  
History Of

PurposeThe purpose of this paper is to examine the extent to which individual risk attitude determines a Cambodian smallholder's choice between a commercial informal loan and a credit from a licensed microfinance institution.Design/methodology/approachThe paper analyzes a sample of smallholder farmers in the Ratanakiri province in northeastern Cambodia, a country with a long history of microfinance and a saturated microcredit market. Employing a binary and a multinomial logit model, this paper assesses the effect of individual risk attitude on the choice of a financial instrument.FindingsThe results reveal a statistically significant relationship between the choice of a credit source and an individual's risk attitude: On average (c.p.) the less risk averse the smallholder is, the more they tend to prefer an unlicensed commercial lender.Practical implicationsThe findings suggest that less risk-averse individuals tend to take up riskier and generally more expensive informal loans. Measures to increase the safe access to financial services for less risk-averse borrowers as well as improvements in financial literacy should be undertaken to protect smallholders from taking risky choices.Originality/valueAlthough existing studies have examined the importance of risk attitudes between credit provider and borrower, they focus mainly on the lender's perspective. This paper provides new insights on how risk attitude influences the borrower's choice in Cambodia. Thus, this study is relevant for policymakers in countries with oversaturated microcredit markets and a high prevalence of informal lenders.

scholarly journals How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective

2019 ◽  
Vol 11 (10) ◽  
pp. 2990 ◽  
Author(s):  
Jianmu Ye ◽  
KMMCB Kulathunga
Keyword(s):  
Financial Literacy ◽  
Structural Equation ◽  
Financial Risk ◽  
Risk Attitude ◽  
Dual Process ◽  
Chief Financial Officers ◽  
Access To Finance ◽  
Positive Effects ◽  
Knowledge Based ◽  
The Impact

Role of the knowledge-based resources in promoting sustainability in small and medium enterprises (SMEs) is currently a topic of debate. Financial literacy has been identified as a vital knowledge resource for financial decision making, but insufficient attention has been given to how SMEs’ financial literacy affects their sustainability. Drawing upon a knowledge-based perspective, peaking order theory and dual process theory, we constructed an integrated model to examine the impact of financial literacy, access to finance and financial risk attitude on SMEs’ sustainability. The sample included 291 chief financial officers (CFOs) of SMEs in Sri Lanka. The output of structural equation modelling revealed direct positive effects of financial literacy, access to finance and financial risk attitude on sustainability. Financial literacy also emerged as a predictor of access to finance and financial risk attitude. Moreover, access to finance and financial risk attitude were found to be partial mediators of the relationship between financial literacy and SMEs’ sustainability. Theoretical implications and practical implications for policymakers, industry practitioners and academics interested in promoting sustainability amongst SMEs are discussed.

scholarly journals Pengaruh Risk Attitude, Risk Perception, dan Subjective Norm terhadap Risk Intended Behavior dari Restoran Makanan yang Tidak Memiliki Sertifikasi Halal bagi Konsumen Muslim, dengan Variabel Moderator Religiusitas

2018 ◽  
Vol 5 (2) ◽  
pp. 130
Author(s):  
ROJIB BURHAN WINAHYU
Keyword(s):  
Consumer Behavior ◽  
Risk Perception ◽  
Risk Behavior ◽  
Risk Attitude ◽  
Subjective Norm ◽  
Partial Least Square ◽  
The Body ◽  
Least Square ◽  
Behavior Intention ◽  
The Face

Restaurant in East Java last few years has increased significantly, where they come to offer a wide  selection  of  new  and  exciting  menus  to  satisfy  consumers.  On  the  other  hand  a  lot  of publicity to grow, both through print and electronic media about the composition of the food in them contain components harmful to the health of the body as well , including the types of food that is prohibited for consumption by religious law ( especially for Muslims ) widely circulated and highly troubling . This phenomenon is reinforced with only three restaurants in East Java that has a halal certification. Of course it is ironic that the majority of the population in East Java is Muslim. It should be noted by the company restaurant food is how consumer behavior in the  face  of  such  phenomena.  Where  the  risk  is  influenced  consumer  behavior  from  attitudes towards risk (risk attitude), risk perception, subjective norms and consumer behavior in the face of  possible  risks  that  would  happen  (risk  behavior  intention)  of  restaurant  that  haven’t halal certification. This study using a quantitative design with statistical tools Partial Least Square (PLS). The results found that the risk attitude, risk perception, subjective norm effect on risk intention  behavior.  While  the  value  of  religiosity  a  person  does  not  give  effect  to  the relationship of risk attitude and risk perception on risk behavior intention

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