Impact of behavioral Biases,Digital Media and Financial Literacy as Joint Determinants of Investment Decisions among Generation Z in India

This study examined how behavioural biases, digital media exposure and financial literacy are related to the investment decisions of Generation Z investors in India, using 24 unique survey responses. Behavioural biases emerged as the main correlate of investment decisions: the joint model explained 50.5% of the variance and only biases were significant within it, with herding the one bias that stood out individually. Digital media exposure and financial literacy were not significant predictors when their effects were tested, and literacy did not significantly moderate the influence of biases. Investment decisions did not differ meaningfully by demographic group. Given the small sample, low scale reliability and the failure of an alternative outcome to reproduce the bias effect, the findings should be viewed as preliminary evidence that motivates a larger, better-instrumented study. Overall, the study adds to behavioural finance evidence from an emerging market by treating psychological, digital and knowledge-based influences within one framework for the investors who will shape India’s capital markets over the coming decades.

Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Sage Publications. Banerjee, A. V. (1992). A simple model of herd behavior. The Quarterly Journal of Economics, 107(3), 797–817. Barber, B. M., & Odean, T. (2000). Trading is hazardous to your wealth: The common stock investment performance of individual investors. The Journal of Finance, 55(2), 773–806. Barber, B. M., & Odean, T. (2001). Boys will be boys: Gender, overconfidence, and common stock investment. The Quarterly Journal of Economics, 116(1), 261–292. Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research. Journal of Personality and Social Psychology, 51(6), 1173–1182. Bikhchandani, S., & Sharma, S. (2001). Herd behavior in financial markets. IMF Staff Papers, 47(3), 279–310. Chen, G., Kim, K. A., Nofsinger, J. R., & Rui, O. M. (2007). Trading performance, disposition effect, overconfidence, representativeness bias, and experience of emerging market investors. Journal of Behavioral Decision Making, 20(4), 425–451. Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Lawrence Erlbaum Associates. Fisher, R. A. (1925). Statistical methods for research workers. Oliver and Boyd. Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate data analysis (8th ed.). Cengage Learning. Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291.