The effect of demographic factors on Indonesian consumers’ choice of investment products

Authors

  • Anna Triwijayati Universitas Ma Chung
  • Melany Melany Universitas Ma Chung
  • Dian Wijayanti Universitas Ma Chung

DOI:

https://doi.org/10.31098/ebs.v1i1.56

Keywords:

Investment, Demography, Decision making, Consumer, Indonesia

Abstract

Research on the effects of demographics on investment decisions is part of the overall map of Indonesian consumer behavior, which is different from consumer behavior in other countries. The purpose of this study is to analyze the effect of demographic factors on consumers' decisions to choose kinds of investment. In this study, four categories of investment options were considered: savings, stocks, gold, and other investments, the latter representing many other sub-types of investment. The demographic variables were gender, marital status, age, income, employment, education, and social class, with the amount of investment as another kind of variable. In terms of methodology, this research is a causal comparison that focuses on the demographic factors and types of investment. Data were taken from 631 respondents from various regions in Indonesia through an online survey using accidental sampling techniques. Data were analyzed using multinomial logistic regression analysis. This study found that the amount of investment affects the choice of investment category (savings, stocks, gold, etc.). Variables such as gender, marital status, education, and income, significantly influence at least one choice from a variety of investments. The gender variable only affects the choice of gold as an investment. Meanwhile, the variables of marital status and education level affect the decision to choose stocks. Income affects the decision to choose savings. Other variables, such as age, occupation, and social class, do not significantly affect investment choices. This research is expected to benefit investment managers incorrectly segmenting and targeting clients. The limitation of this research is that investment decisions are only based on the four categories of investment options: savings, stocks, gold, and other investments

References

Afroze, T., Rahman, S. M. Z., Bristy, J. F. & Parvin, F., 2015. Factors influencing investment decision in the capital market: A study of individual investors in Bangladesh. European Journal of Economics, Finance and Administrative Sciences, Issue 71, pp. 80-96.

Bajaj, U. & Kalra, R., 2018. A study on the factors that affect the investment decision of an entrepreneur. Journal of Emerging Technologies and Innovative Research, 5(12), pp. 174-181.

Bishnoi, S., 2014. The relation between investment objectives and demographic variables. Journal of General Management Research, 1(1), pp. 91-107.

Chavali, K. & Mohanraj, M. P., 2016. Impact of demographic variables and risk tolerance on investment decision: An empirical analysis. International Journal of Economic and Financial Issues, 6(1), pp. 169-175.

Geetha, N. & Ramesh, M., 2012. A study of the relevance of demographic factors in investment decisions. Perspectives of Innovations, Economics & Business, 10(1), pp. 14-27.

González, R. D. L., 2017. Demographic factors as significant indicators for short and long-term investment in industrialized, emerging, and frontier countries, Georgia: s.n.

Hemalatha, S., 2019. Factors influencing the investment decision of the individual related to selected individual investors in Chennai City. International Journal of Innovative Technology and Exploring Engineering (IJITEE), 8(6S4), pp. 457-461.

Kadariya, S., 2012. Factors affecting investor decision making: A case of Nepalese capital market. Journal of Research Economics and International Finance (JREIF), 1(1), pp. 16-30.

Kanten, P., Girgin, B. & Kurt, E., 2018. The antecedent of individual investment behavior: Materialism, risk aversion, positive and negative effects. Istambul, Turkey, PressAcademia Procedia (PAP).

Khanam, Z., 2017. The impact of demographic factors on the decisions of investors during dividend declaration: A study on Dhaka Stock Exchange Bangladesh. IOSR Journal of Business and Management, 19(8), pp. 1-7.

Lan, Q., Xiong, Q., He, L. & Ma, C., 2018. Individual investment decision behaviors based on a demographic characteristic: Case from China. PLoS ONE, 13(8), pp. 1-18.

Lodha, D. & Baser, N., 2016. Critical analysis of linkages between demographic factors and real estate investment. International Journal of Real Estate Studies, 10(2), pp. 1-12.

Mak, M. K. & Ip, W. H., 2017. An exploratory study of investment behavior of investors. International Journal of Engineering Business Management, Volume 9, pp. 1-12.

Nguyen, T. & Schüßler, A., 2012. Investment decisions and socio-demographic characteristics-empirical evidence from Germany. International Journal of Economics and Finance, 4(9), pp. 1-12.

Patel, B. & Modi, V., 2017. International Journal of Latest Engineering and Management Research, 2(12), pp. 31-38.

Perera, A. M., 2016. Gender attitudes and investor behavior: Evidence from individual investors in the northwestern province. Sri Lanka Journal of Economic Research, 4(1), pp. 3-17.

Ramanathan, K. V. & Meenakshisundaram, K. S., 2015. A study on factors influencing investment decisions of bank employees. International Journal of Research in IT and Management, 5(9), pp. 62-74.

Rizvi, R. & Abrar, A., 2015. Factors affecting an individual investor behavior- An empirical study in twin cities (Rawalpindi and Islamabad) of Pakistan. SS International Journal of Economics and Management, 5(5), pp. 1-27.

Sadiq, M. N. & Ishaq, H. M., 2014. Effect of demographic factors on the behavior of investors during the choice of investment: Evidence from twin cities of Pakistan. Global Journal of Management and Business Research: Finance, 14(3), pp. 46-56.

Sarwar, A. & Afaf, G., 2016. A comparison between psychological and economic factors affecting individual investor's decision-making behavior. Cogent Business and Management, 3(1232907), pp. 1-18.

Sharma, A., Douglas, T. & Jaworski, P., 2017. Market research of factors influencing women's preference in investment. International Journal of Management and Applied Science, 3(8), pp. 79-86.

Singh, J. & Yadav, P., 2016. A study on the factors influencing investors' decision to invest in equity shares in Jaipur and Moradabad with special reference to gender. Amity Journal of Finance, 1(1), pp. 117-130.

Stratford, K. & Cowling, A., 2016. Chinese household income, consumption, and savings. RBA Bulletin, Reverse Bank of Australia, September.pp. 31-40.

Downloads

Published

2020-10-25

Issue

Vol. 1 No. 1 (1): October 2020

Section

Articles

License

Copyright Notice 

1. Author and Manuscript

  • The author whose name appear in the above statement is declaring that he/she is the author of the stated manuscript
  • All of the authors, if any, has already aware of this agreement and give consent for the mentioned name to act on their behalf


2. Validity

  • The author stated that the manuscript is original and has never been published elsewhere.
  • The author has obtained permissions from other contributors, if any
  • The author has specifically mentioned and cited all external materials properly
  • Note: External materials refers to any material, writings, figures, tables, illustrations, or any other materials which is not being produced, made, or patented by the author
  • The author holds the sole responsible should there are any mistyping; unclear citation and holds responsible should there are any inappropriate manners such as unlawful, breaches, obscene, or any other reasons which are not aligned with the law and norm.

3. Deliverable of Manuscript and Other Materials

  • The Contributor/Author shall deliver their manuscript using the provided and acceptable format (doc. Or docx) in the assigned date as well as author copyright document signed.
  • Inability delivering the manuscript in the stated date and format will affecting the publication process thus, The Publisher have the rights to reject the manuscript and terminate the letter of acceptance or letter of offerings
  • Author is responsible to deliver the manuscript using the provided format. Note: All of the figures, tables, illustrations, or any other materials that will be inserted in the manuscript need to be in high quality
  • Should the author decided to alter the manuscript format, the fee will be charged and bore by authors

The Author give “Yayasan Sinergi Riset dan Edukasi” (here forth known as RSF Press) the unlimited right to publish the contribution identified above, without any restraints, in any form, at any time, directly or through others, to reproduce, transmit, archive, lease/lend, sell and distribute the contribution or parts thereof individually or together with other works in any language, revision and version (digital and hard), including reprints, translations, photographic reproductions, microform, audiograms, videograms, electronic form (offline, online), or any other reproductions of similar nature, including publication in the aforementioned book or any other book, as well as, the usage for advertising purposes. RSF Press will ensure that the Author’s name(s) is/are always clearly associated with the manuscript, and the publishers will not make any substantial change to the manuscript without consulting the author and ask for their consent. RSF Press is also entitled to carry out editorial changes in the contribution with the sole purpose of enhancing the overall organization and form of the contribution.

The Author retains the rights to publish the contribution in his/her own web site and thesis, in his/her employer’s web site and to publish a similar or revised version elsewhere, as long as it is clearly stated that the contribution was presented first RSF Press and the corresponding DOI is associated with the contribution.