Predicting the financial behavior of Indian salaried-class individuals

  • Received July 21, 2022;
    Accepted December 7, 2022;
    Published December 21, 2022
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/imfi.20(1).2023.03
  • Article Info
    Volume 20 2023, Issue #1, pp. 26-37
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This work is licensed under a Creative Commons Attribution 4.0 International License

COVID-19 has caused not only unprecedented health crises but also economic crises among individuals across the world. White-collar (salaried-class) employees with a fixed salary face financial insecurity due to job loss, pay cuts and uncertainty in retaining a job. This study examines the financial behavior of Indian white-collar salaried-class investors to their cognitive biases. In addition, the mediating effect of financial self-efficacy on cognitive biases and financial behavior is examined. Respondents were given structured questionnaires (google forms) through emails and WhatsApp for data collection. SPSS and R-PLS are used to analyze the data. Conservatism (r = –.603, p < 0.05) and herding bias (r = –.703, p < 0.05) have a significant negative correlation with financial behavior. Financial self-efficacy has a significant positive correlation (r =.621. p < 0.050). Conservatism and herding predicted 60.5% and 62.2% of the variance, respectively. The direct and indirect paths between conservatism bias, financial self-efficacy, and financial behavior are significant. The paths between herding, financial self-efficacy and financial behavior are also significant.

Acknowledgement
The authors express their sincere gratitude to Dr Suresha B (Associate Professor, School of business and management, CHRIST (Deemed to be university), Bangalore, India ) for encouraging and motivating them to accomplish this research task. The authors also extend their sincere thanks to Prof. Krishna T.A. (Assistant Professor, School of business and management, CHRIST (Deemed to be university), Bangalore, India) and Dr Sridevi Nair (Assistant Professor, School of business and management, CHRIST (Deemed to be university), Bangalore, India) for their support throughout this empirical investigation.

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    • Figure 1. Mediation model (C-FSE-FB)
    • Figure 2. Mediation model (H-FSE-FB)
    • Table 1. Descriptive statistics
    • Table 2. ANOVA
    • Table 3. Correlation matrix
    • Table 4. Internal consistency reliability (C-FSE-FB)
    • Table 5. Validity of scales (C-FSE-FB )
    • Table 6. Coefficient of determination (C-FSE-FB)
    • Table 7. Total effect size (C-FSE-FB)
    • Table 8. Internal consistency reliability (H-FSE-FB)
    • Table 9. Validity of scales (H-FSE-FB)
    • Table 10. Coefficient of determination (H-FSE-FB)
    • Table 11. Total effect size (H-FSE-FB)
    • Conceptualization
      Ankita Mulasi, Jain Mathew
    • Data curation
      Ankita Mulasi
    • Formal Analysis
      Ankita Mulasi, Jain Mathew
    • Investigation
      Ankita Mulasi
    • Methodology
      Ankita Mulasi, Jain Mathew
    • Project administration
      Ankita Mulasi, Jain Mathew, Kavitha Desai
    • Validation
      Ankita Mulasi, Jain Mathew
    • Visualization
      Ankita Mulasi, Jain Mathew, Kavitha Desai
    • Writing – original draft
      Ankita Mulasi
    • Supervision
      Jain Mathew, Kavitha Desai
    • Writing – review & editing
      Jain Mathew, Kavitha Desai