A Comparative Study on Factors Influencing Investment Decisions of Investors Based on Income Level in Coimbatore

Abstract

This research project is a comparative analysis between the levels of income of individuals making investment decisions based on different factors from the Traditional Finance Theory and Behavioural Finance Theory. The study involves data that was collected using quota sampling method from the students and housing community in Coimbatore. There are about 154 responses collected for the purpose of the study. The non-parametric test Mann-Whiteney U Test was done to compare the impact of various variables in the different income groups- Low and High by analysing the statistically significant differences. The findings reveal that the factors of traditional finance and behavioural finance differ amongst the income groups. The perception of financial literacy has no significant difference between the categories. Risk & Return are almost perceived similarly by both the groups. Frame dependence and Herd behaviour have significant difference in its impact on the income groups. Although the findings reveal insightful information regarding the factors of investment decision which can be utilised by various stakeholders like investors and financial advisors, the study has its own limitations of using non-probability sampling method.