Gender and Investment Risk Appetite: A Behavioural Finance Perspective

Economic, psychological and demographic factors influence the investment decision-making process, and one such demographic factor is gender. This study discusses the correlation between the attitudes of gender and the self-reported investment risk appetite, and takes into account the relationship between the importance of investment risk knowledge and this correlation. The family, friends and professional contacts were sampled using convenience sampling method, and the primary data were gathered by structured questionnaire by visiting the Delhi NCR area. A total of 74 respondents took part, 45 females (60.8%) and 29 males (39.2%) aged between 21 years and over 60 years. The differences in risk appetite and the level of confidence in the knowledge of investment risks by gender were addressed using statistical tests including Mann-Whitney U test, chi-square test of independence and Spearman's rank-order correlation. Male respondents reported a significantly higher risk appetite (M = 3.21) than female respondents (M = 2.53; Mann-Whitney U = 911.00, z = 2.86, p = .002), and gender was significantly associated with risk-appetite category, χ²(4, N = 74) = 10.46, p = .033, Cramér's V = .38. These findings reflect the association within this sample that occurred when these factors were not independently controlled, and the sample was a non-random convenience sample in the 41-60 age range and from a single metropolitan region, and therefore they do not necessarily mean that there is a causal or generalisable effect of age on financial literacy on investment behaviour. The outcome, however, suggests that gender-inclusive financial education and counseling approaches that take into account gender differences in confidence and risk appetite are beneficial.