Analyzing Factors Affecting Financial Literacy and Its Impact on Investment Behavior Among Adults in India

24 Pages Posted: 7 Nov 2018 Last revised: 28 Jan 2021

Date Written: October 4, 2018

Abstract

Financial literacy is essential for making key financial decisions related to saving, borrowing, and investment. Although numerable studies have been conducted to find elements of financial literacy, most of them focus on developed countries. This study aims to determine characteristics that affect levels of financial literacy in India and the impact of financial literacy on investment behavior. Primary data from 309 respondents across India was collected for the purpose of the study and was analyzed using empirical methods such as ordinary least square (OLS) regression and t-test. It was found that financial literacy among respondents was low and significant differences existed based on sociodemographic and economic factors. Unexpectedly, financial literacy was found to have no effect on investment behavior. To the best of the authors’ knowledge, this study is among the first, if not the first, of its kind to be conducted in India. The findings have significant implications for financial education and public policy programs.

Keywords: Financial Literacy, Investment Behavior, Household Finance, Socioeconomic Characteristics

JEL Classification: D14, D19, G11

Suggested Citation

Singh, Ritvik, Analyzing Factors Affecting Financial Literacy and Its Impact on Investment Behavior Among Adults in India (October 4, 2018). Available at SSRN: https://ssrn.com/abstract=3266655 or http://dx.doi.org/10.2139/ssrn.3266655

Ritvik Singh (Contact Author)

Vanderbilt University ( email )

Nashville, TN 37235
United States

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