The Effect of Financial Literacy and Demographic Factors on Behavioral Biases of Investors During a Pandemic

Abstract

AbstractThe purpose of this study is to look at the impact of financial literacy and demographics on investor behavioral biases in Indonesia. Overconfidence, disposition effect, mental accounting, and herding bias were among the eight variables used in this study, which included four independent variables: financial literacy, age, occupation, and income, as well as four dependent variables: overconfidence, disposition effect, mental accounting, and herding bias. This is a sort of research that uses a quantitative technique to do basic research. The questionnaires were distributed to investors listed on the Indonesia Stock Exchange for this study. The findings reveal that gender and age influence overconfidence bias, that financial literacy and income level influence disposition, that financial literacy and age influence mental accounting, and that financial literacy and occupation influence herding prejudice.