Study of Impact of Decision and Economic Variables on Preference for Stocks (High Risk Investment) Using Regression Analysis: An Empirical Study of Punjab

Author:Kanika Marwahaa* and Sangeeta Arorab

Abstract:
Purpose: The present study is an exploratory attempt to analyze the impact of decision and economic variables on overall preference for stocks (high risk investments). Design/Methodology/Approach: For aforesaid purpose, the data have been collected through primary survey by framing a questionnaire answered by 607 respondents from three districts of Punjab i.e. Amritsar, Jalandhar and Ludhiana. For collecting the data, simple random sampling has been employed. Factor analysis and multiple regression analysis have been used to analyze the data. Factor analysis revealed ten factors i.e. credibility factor , general recommendation factor, anticipated benefits factor, personal financial needs factor, pre- investment analysis factor, market information factor, expert recommendation factor, low volatility influences factor, pocket friendly factor and social influences factor. Findings: Findings of multiple regressions analysis revealed that Credibility factor has highest positive impact and lead to overall preference for high risk investments followed by pre- investment analysis factor as the second most impacting factor followed by anticipated benefits factor as third most impacting factor and market information factor as the fourth most impacting factor having significant and positive impact on the overall preference for stocks i.e. high risk investment. Expert recommendation factor and general recommendations factor have positive but less impact on preferences of investors. Practical implications: The study provides implications to financial service providers in understanding the variables impacting the preferences of individual investors of Punjab and designs the marketing activities according to the needs of the investors. Originality/value: As no such study has already been conducted in Punjab, India (to the best of researcher's knowledge), this study potentially helps in abridging gaps in literature.

Keywords:Keywords: Individual stock investors, financial psychology, investment behavior, factor analysis, investment decisions, multiple regression analysis.

DOI:

International Journal of Trade & Commerce (Vol: 5 Issue:2)