Impact of cognitive and emotional biases and risk attitude on financial behavior: A study of employees in universities of Punjab
Loading...
Date
2023
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Punjab Agricultural University
Abstract
Behavioral finance is a combination of economics and finance with behavioral and psychological theories. Under behavioral biases, emotional biases come from the feelings, intuition whereas cognitive biases occur due to the misunderstanding of data, faulty reasoning. Emotional and cognitive biases and risk attitude lead to faulty financial decisions and current study helps in avoiding such mistakes and risk attitude is defined as chosen response to perception of uncertainty. The aim of the current study is to find the relationship between demographics and financial attributes, and risk attitude and to study the impact of selected cognitive and emotional biases and risk attitude on financial behavior. For studying these factors primary data is collected with the help of predesigned structured questionnaire from teaching and non-teaching staff of universities of Punjab. The exploratory factor analysis is used on first 200 respondents (100 teaching and 100 nonteachings) to developing the factors and reliability and validity is checked by using confirmatory factor analysis on remaining 400 respondents. Then impact of behavioral biases and risk attitude on financial behavior is analyzed using Amos. The finding can use by universities’ staff and other investors in understanding these biases and how to avoid them as far as possible. The financial planners and portfolio managers can design best portfolio for their clients after considering all the biases and their risk attitude and behavior of individuals. It helps the society to make better decision maker for their investment and they will understand about tricks in which they lose money.
Description
Keywords
Citation
Batra, Nitish (2023). Impact of cognitive and emotional biases and risk attitude on financial behavior: A study of employees in universities of Punjab (Unpublished Ph.D. Dissertation). Punjab Agricultural University, Ludhiana, Punjab, India.