Assessment of Investment Intention Based on Financial Literacy, Personality Traits, Behavioral Biases, Investor Traits and Financial Self-Efficacy

DOI

10.2991/978-94-6463-666-6_18How to use a DOI?

Keywords

Instrument; Investment Intention; Financial Literacy; Personality Traits; Behavioral Biases; Investor Traits; Financial Self-Efficacy

Abstract

Investment is investing money for profit and accepting risks due to future uncertainties. Stocks and mutual funds are common investment options for individuals aiming to build wealth. There are several existing instruments measuring investment intention using 2 to 3 factors. However, none connected them simultaneously. Therefore, this study aims to develop a valid and reliable instrument for assessing investment intention by integrating 5 key factors: financial literacy, personality traits, behavioral biases, investor traits, and financial self-efficacy. The instrument consists of 6 constructs, 15 dimensions, and 52 items. The instrument is validated using content and face validity involving two experts and a focus group containing five investors. The instrument reliability testing was implemented using Cronbach Alpha and Exploratory Factor Analysis (EFA) based on pilot (104 respondents) and main study (272 respondents). The findings show that the overall Cronbach Alpha values are 0.88 (pilot) and 0.92 (main), and the EFA identified 6 factors explaining 87.1% of the total variance, indicating instrument reliability. Strong correlations exist between investment intention and financial literacy (0.85), financial self-efficacy (0.89), and personality traits (0.85), respectively, while moderate correlations with behavioral biases (0.61) and investor traits (0.65). These findings demonstrate that the instrument is valid and reliable, providing a comprehensive tool for assessing investment intention. This tool enhances the understanding of the psychological and cognitive factors influencing investment behavior, offering significant potential for researchers and practitioners in behavioral finance.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Chan Soo Peng
AU  - Suzilah Ismail
PY  - 2025
DA  - 2025/03/17
TI  - Assessment of Investment Intention Based on Financial Literacy, Personality Traits, Behavioral Biases, Investor Traits and Financial Self-Efficacy
BT  - Proceedings of the 12th International Conference on Business, Accounting, Finance and Economics (BAFE 2024)
PB  - Atlantis Press
SP  - 294
EP  - 308
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-666-6_18
DO  - 10.2991/978-94-6463-666-6_18
ID  - Peng2025
ER  -