Evaluating the linkage between Behavioural Finance and Investment Decisions Amongst Indian Gen Z investors Using Structural Equation Modeling
Evaluating the linkage between Behavioural Finance and Investment Decisions Amongst Indian Gen Z investors Using Structural Equation Modeling

Summary/Abstract: The aim of this research study is to investigate the relationship between behavioural finance and investment decisions amongst Gen Z (Generation Z) investors. A structural equation modeling is employed to analyse the behavioural biases such as financial literacy, risk attitude, herding, and information search to study the linkage. Analysing the behavioural factors with the decision making power of the Gen Z investors helps in taking strategic decisions and framing trading policies. The impact of the behavioural biases on Gen Z investors is studied through a sampling survey of 144 valid respondents consisting of Gen Z investors in Maharashtra (India). The survey conducted in between January 2021 to May 2021. By applying structural equation modeling (SEM) confirmatory factory analysis is conducted to check the validity measures and path analysis is performed on how behavioural finance and investment decisions are connected. The results indicate that the biases such as financial literacy, risk attitude and information search has a positive and significant impact on the decision making of investors while the trait herding has a very weak and negative relationship with investment decisions.

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