Gender Attitudes and Investor Behaviour: Evidence from Individual Investors in North Western Province

Abstract

Individual investment behaviour has become more sophisticated in past decades. Some scholars have explored how various demographic factors, predominantly gender, influence individual investor behaviour. Besides, they have concluded that there are three behavioural factors affecting the investment decisions of individual investors, such as cognitive factors (i.e. overconfidence, anchoring, hindsight bias, gambler’s fallacy, investor optimism), emotional factors (i.e. mental accounting, endowment effect, loss aversion, regret aversion), and herding factors (i.e. following the habits of other investors in buying , selling , choice and trading of investments). This paper discusses the influence of investors’ gender attitudes on investor behaviour, and in turn, their impact on the selection of different investment avenues in the Colombo Stock Exchange (CSE) in Sri Lanka. It reports the views of 97 (N=97) individual investors in the CSE, randomly selected from the North Western Province (NWP). The results reveal that, though people accepted the importance of investing in the CSE, less investors actually have an appropriate plan to invest in shares a majority of them male. The results validate that individual gender attitude differences significantly influence cognitive factors, emotional factors, and herding factors, and in turn, individual investor behaviour in CSE. These findings also illustrate that there seems to be a strong correlation among the investor’s demographic factors, market factors, risk-bearing capacity, lifestyle characteristics, and behaviour.