An Empirical Study On Gender Difference in The Investment Pattern of Retail Investors

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An empirical study on gender difference in the Investment pattern of retail

Investors
Article in The International Journal of Interdisciplinary Social Sciences: Annual Review · February 2020
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Acme Intellects International Journal of Research in Management, Social Sciences & Technology ISSN 2320 – 2939 (Print) 2320-2793 (Online)
Let your Research be Global search– An Ultimate search of Truth- Reforms through Research Vol- 14 No. 14 Apr 2016
An empirical study on gender difference in the Investment pattern of retail

Investors
by R. Suyam Praba [a]
Abstract
This study aims to understand the impact of gender difference on Investment decision
making and also to determine their most preferred investment avenue. The overall purpose of
this research is to gain knowledge about key factors that influence investment behavior and the
impact of these key factors on the investment decision-making among men and women. In this
study a detailed analysis is made on the investment objective, preference, and the pattern among
men and women.
Keywords: Gender, Investment pattern, Risk profile, Financial information source, Investment
decision making, Preference, Financial dependency, Encouraging factor of Investment,
Borrowing habit
[a]
R. Suyam Praba,
Ph.D Research Scholar,
Bharathiar School of Management and Entrepreneur Development,
Bharathiar University, Coimbatore, Tamil Nadu, India.
Email ID: suyam.praba@gmail.com
Contact Number: +91 9994371430
1. Introduction:
Financial planning is an essential and inevitable in this modern era where both men and
women are employed, educated and are aware of their financial goals. There are various
investment avenues available in the market in the form of physical assets and financial assets.
They are deposits, gold, insurance, bonds, debentures, land, building, post office savings
account, provident fund, pension plans, national saving certificate, mutual funds, shares and
commodity trading. These avenues give yield and returns, which are competitive enough and are
highly required for the present economic scenario for the survival in the inflated world. The risk-
return factor is one of the important characteristics in selecting an appropriate investment
avenue.
”Aano bhadraa krathavo yanthu vishwathaha”-"Let the noble thoughts come to all from all directions". Page No.1
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2. Research Objectives:
1) To gain knowledge about key factors that influence investment behavior and impact
investment decision-making processes among men and women.
2) The study examines impact of gender differences on the attitudes towards different types
of savings and investment alternatives.
3) To prepare a comprehensive profile of savings and investment behaviour among men and
women in the context of income, expenditure and consumption patterns.
4) To obtain the risk profile of the men and women relate to their savings and investment
behaviour.
5)
3. Research Methodology
The study presents the investment perceptions between men and women. Keeping this in
mind, schedule was created among the salaried class individual who work in a Bank, NBFC,
Insurance, Mutual Fund, IT, ITES, and in Education institution. The detailed information about
household earnings, savings and investment profile, income-expenditure, financial and non-
financial asset holdings, and aspirations and decisions in investment depending on their
perceptions of various saving and investment options were obtained using a structured
questionnaire. This research has adopted descriptive research design using interview method.
The sampling techniques used for the study is Non-Probabilistic Convenience sampling method.
Since the exact population of salaried class Investors is not known exactly, the selection is left to
the researcher who is to select the sample. The study is based on the responses of 405 individuals
who are salaried income group in Coimbatore city. The data were collected through structured
questionnaire from November 2012 to April 2013. Information was collected on various aspects
of respondents’ investment behaviors, attitudes, and beliefs.
4. Analysis and Interpretation
H1o: There is no significant association between gender and risk profile of Individuals.
Table No: 1 Gender and Risk Profile
Risk tolerance Profile

Gender Total
Low Below Average Above Average High
Tolerance Average Tolerance
Male No 2 14 91 84 45 236
% 0.8% 5.9% 38.6% 35.6% 19.1% 100%
Female No 0 17 93 43 16 169
% 0.0% 10.1% 55.0% 25.4% 9.5% 100%
Total No 2 31 184 127 61 405
% 0.5% 7.7% 45.4% 31.4% 15.1% 100%
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
a
Pearson Chi-Square 18.765 4 0.001
Likelihood Ratio 19.786 4 0.001
Linear-by-Linear Association 13.535 1 0.000
N of Valid Cases 405
a. 2 cells (20.0%) have expected count less than 5. The minimum expected count is 0.83.
Source: Primary
From the above table No: 1, it is determined that the P value is 0.001 which is lesser than
0.05 (5% level of Significance), the null hypothesis is rejected. Therefore, there is a significant
association between gender and risk profile.19.1% of male respondents fall under high risk
tolerance profile category, whereas 55.0% of female respondents fall under average risk
tolerance profile category. Hence it is clearly evident from the above table that men are high risk
tolerant than women.
H2o: There is no significant association between gender and Characteristic of Investment

Avenues.
Table No: 2 Gender and Characteristic of Investment Avenues
Characteristic of Male Female

Investment Avenues Mean scores Rank Mean scores Rank
Safety 2.14 1 1.84 1
Capital appreciation 3.01 3 2.99 2
Liquidity 3.39 4 3.30 3
Income generation 2.99 2 3.42 4
Diversification 4.98 6 4.40 5
Tax benefit 4.49 5 5.04 6
Chi-Square 372.584 300.635
Asymp. Sig. 0.00 0.00
Source: Primary
From the above table No: 2, it is determined that the p value is 0.00, which is lesser than
0.05 (5% significance level), hence the null hypothesis is rejected, therefore there is significant
association between gender and their expected characteristics in investment avenue. From the
above table it is inferred that male and female respondents have ranked safety feature as first
option and women ranked capital appreciation as second while men ranked income generation as
second rank. Tax benefit and diversification are given least rank by both the genders.
H3o: There is no significant association between gender and most preferred Investment
Avenues.
Table No: 3 Gender and Most preferred Investment Avenue
Gender Most preferred Investment avenue Total

Deposit Gold Property Insurance Shares PF/PPF Others
Male No 59 45 72 31 16 7 6 236
/MF /NSC
% 25.0% 19.1% 30.5% 13.1% 6.8% 3.0% 2.5% 100%
Female No 35 59 46 13 12 2 2 169
% 20.7% 34.9% 27.2% 7.7% 7.1% 1.2% 1.2% 100%
Total No 94 104 118 44 28 9 8 405
% 23.2% 25.7% 29.1% 10.9% 6.9% 2.2% 2.0% 100%
Source: Primary
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 15.802a 6 0.015
From the above table No: 3, it is determined that the p value is 0.015 is lesser than 0.05
hence the null is rejected. Therefore there is significant association between gender and the most
preferred investment avenue. The table shows that 30.5% of the male respondents prefer to
investment in property whereas 34.9% of female respondents’ most preferred investment avenue
is gold.
H4o: There is no significant association between gender and Age when first investment was
made
Table No: 4 Gender and Age when first investment was made
Gender Age when first investment was made Total

<20 21-25 26-30 31-35 36-40 >40
Male No 35 117 58 17 7 2 236

% 14.8% 49.6% 24.6% 7.2% 3.0% 0.8% 100%
Female No 47 88 20 13 1 0 169
% 27.8% 52.1% 11.8% 7.7% 0.6% 0.0% 100%
Total No 82 205 78 30 8 2 405

% 20.2% 50.6% 19.3% 7.4% 2.0% 0.5% 100%
Source: Primary
Chi-Square Tests
a
a. 4 cells (33.3%) have expected count less than 5. The minimum expected count is .83.
From the above table No: 4, it is determined that the p value is 0.001 is lesser than 0.05,
hence the null is rejected. Therefore there is significant relationship between gender and age
when their first investment was made. It is inferred that 49.6% of male respondents’ first
investment was made when they age was between 21 to 25 years, whereas female respondents
made their first investment when they were below 20 years of age. Hence it is concluded that
women respondents plan and execute early investment than men.
H5o: There is no significant association between gender and Annual Individual Income
Table No: 5 Gender and Annual Individual Income
Annual Individual Income
Gender 400001 500001 Total

0- 100001 - 200001 - 300001 - >
- -
100000 200000 300000 400000 600000
500000 600000
No 13 62 55 28 27 19 32 236
Male
% 5.5% 26.3% 23.3% 11.9% 11.4% 8.1% 13.6% 100%
No 29 59 37 24 12 2 6 169
Female
% 17.2% 34.9% 21.9% 14.2% 7.1% 1.2% 3.6% 100%
No 42 121 92 52 39 21 38 405
Total
% 10.4% 29.9% 22.7% 12.8% 9.6% 5.2% 9.4% 100%
Source: Primary
Chi-Square Tests
a
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.76.
From the above table No: 5, it is inferred that the p value is 0.000 is lesser than 0.05
hence the null hypothesis is rejected. Therefore there is significant relationship between gender
and annual income of an Individual. It is inferred from the table no: 6, that 13.6% of male
respondents have stated that their annual income is greater than Rs 6.00 Lakhs. 34.9% of female
respondents have stated that their annual income is between Rs 1.00 and 2.00 Lakhs. Hence it is
clear that in this research the men respondents earn more than women respondents.
H6o: There is no significant association between gender and Financial Dependency
Table No: 6 Gender and Financial Dependency
Gender Financial Dependency Total

Nil Low Medium High
Male No 44 36 31 125 236
% 18.6% 15.3% 13.1% 53.0% 100%
Female No 34 6 12 117 169
% 20.1% 3.6% 7.1% 69.2% 100%
Total No 78 42 43 242 405
% 19.3% 10.4% 10.6% 59.8% 100%
Source: Primary
Chi-Square Tests
a
From the above table No: 6, it is inferred that the p value is 0.000 is lesser than 0.05,
hence the null hypothesis is rejected. Therefore there is significant relationship between gender
and individual’s financial dependency. It is inferred from the table no: 6, that 69% of female
respondents and 53% of male respondents have stated that they have high financial dependency.
It is also inferred that only 20% of female respondents are financial independent.
H7o: There is no significant association between gender and Borrowing habit to meet
expenses
Table No: 7 Gender and Borrowing habit to meet expenses
Gender Borrowing habit to meet expenses Total

Very often Often Some times Rarely Never
Male No 8 20 73 61 54 216
% 3.7% 9.3% 33.8% 28.2% 25.0% 100%
Female No 5 8 28 50 56 147
% 3.4% 5.4% 19.0% 34.0% 38.1% 100%
Total No 13 28 101 111 110 363
% 3.6% 7.7% 27.8% 30.6% 30.3% 100%
Source: Primary
Chi-Square Tests
From the above table No: 7, it is inferred that the p value is 0.006 is lesser than 0.05
hence the null is rejected. Therefore there is significant relationship between gender and
Borrowing habit to meet expenses. It is inferred that 33.8% of male respondents borrow
sometimes to meet their expenses whereas 38.1% of female respondents stated that they have
never borrowed to meet their expenses. Hence it is concluded that men borrow more to meet
their expenses compared to that of women.
H8o: There is no significant association between gender and Encouraging factor for
Investment
Table No: 8 Gender and Encouraging factor for Investment
Encouraging factor for Investment
Free Urge Attractive Special

Gender Advertisement Contingency Total
Money to Interest Schemes/
are attractive Management
available Save Rates Offers
for
No 72 12 82 26 11 16 219
Male future
% 32.9% 5.5% 37.4% 11.9% 5.0% 7.3% 100%
No 35 11 75 12 11 5 149
Female
% 23.5% 7.4% 50.3% 8.1% 7.4% 3.4% 100%
No 107 23 157 38 22 21 368

Total
% 29.1% 6.3% 42.7% 10.3% 6.0% 5.7% 100%
Source: Primary
Chi-Square Tests
Linear-by-Linear Association .154 1 0.695
encouraging factor for Investment. It is evident from the Table no:8, that 32.9% of male
respondents prefer to invest only when there is free money available, whereas 50.3% of female
respondents have the urge to save for future is the major encouraging factor behind their
Investment.
H9o: There is no significant association between gender and Household investment

decision-maker
Table No: 9 Gender and Household investment decision-maker
Gender Household investment decision-maker Total

Self Spouse Siblings Childre Parent In-Laws
No 127 30 9 n
8 s
61 1 236
Male
% 53.8% 12.7% 3.8% 3.4% 25.8% 0.4% 100%
No 51 53 5 1 57 2 169
Female
% 30.2% 31.4% 3.0% 0.6% 33.7% 1.2% 100%
No 178 83 14 9 118 3 405
Total
% 44.0% 20.5% 3.5% 2.2% 29.1% 0.7% 100%
Source: Primary
Chi-Square Tests
Household investment decision-maker. It is evident that 53.8% of male respondents make self-
decision on all investment decisions, whereas 33.7% of female respondents have mentioned that
their parents take all investment related decisions.
Table No: 10 Investment pattern in various Investment avenues among men and women
Investment pattern in various Investment avenues

Gender Total
Deposit Gold Property Insurance MF/Shares PF/ PPF Others
No 94 90 68 77 35 72 8 444
Male
% 21% 20% 15% 17% 8% 16% 2% 100%
No 144 117 102 159 94 120 17 753
Female
% 19% 16% 14% 21% 12% 16% 2% 100%
No 238 207 170 236 129 192 25 1197
Total
% 20% 17% 14% 20% 11% 16% 2% 100%
Source: Primary
It is inferred from the above Table No.10, that 21% of male respondents have invested in
deposit and 20% have invested in gold while 21% of female respondents have invested in
insurance and 21% of female respondents have invested in deposit avenues.
Table No: 11 Gender and Financial Information Source
Gender
Financial Information
Female Male Total
Source
No % No % No %
Newspaper 81 37% 51 34% 132 36%
Friends 75 34% 45 30% 120 33%
Internet 71 32% 31 21% 102 28%
Family members 55 25% 45 30% 100 27%
Television 46 21% 29 20% 75 20%
Colleagues 28 13% 23 16% 51 14%
Financial advisor 27 12% 21 14% 48 13%
Magazine 33 15% 14 9% 47 13%
Mailer 6 3% 5 3% 11 3%
FM Radio 3 1% 3 2% 6 2%
Outdoor advertisement 4 2% 1 1% 5 1%
Others 3 1% 0 0% 3 1%
Total 219 100% 148 100% 367 100%
Source: Primary
From the above Table No.11, it is inferred that 37% of female respondents gather
financial information from newspaper and 34% from their friends, while 34% of male
respondents gather financial information from newspaper and 30% from their family members
and friends each.
5. Findings:
Gender differences are significant with the willingness to take risk between men and
women. It is concluded that male investors have high tolerance in their risk profile (19.1%),
whereas the female investors are not above average in their risk profile (65%). Men (33.8%)
borrow sometimes to meet their expenses, while women (38.1%) have never borrowed to meet
their expenses. When studied on their annual income, it is evident that men earn more when
compared to women. Women (69.2%) are highly financially dependent than men. Newspaper is
the first financial information source for men and women, but the study reveals that women use
internet and read magazine more when compared to men. Men (53.8%) take self-decision on
investment in their family while women (33.7%) reveal their parents take investment decisions in
their family. Men (32.9%) have stated that they invest only when free money is available; while
women (50.3%) have stated that it the urge to save for future encourages them to invest. Both
men and women have ranked safety feature as first characteristics of any Investment avenue, and
men ranked income generation as second and women ranked capital appreciation as second
characteristics of Investment Avenue. Men (30.5%) prefer to invest in property and women
(34.9%) prefer to invest in gold, but when probed on their actual investment pattern, the study
reveals that men (21%) have invested in deposit while women (21%) have invested in insurance.
6. Limitations of the Study

1) Sample size of the study is 405 salaried educated Investors in Coimbatore city. The
sample size may not adequately represent the national market.
2) This study has not been conducted for a longer time horizon covering market ups and
downs. The state of market has a significant influence on the buying patterns and
preferences of Investors. The study was conducted during a particular period of time and
hence it will not be applicable for all periods.
3) The study being based on a survey of Investors, it includes all limitations inherent in the
questionnaire form of research.
7. Conclusion
From this research, it is evident that there is wide difference in risk attitude, preference,
selection, pre-evaluation, financial information source, reference group, financial motive,
financial planning, income level, borrowing habit, and investment decision making of both men
and women. This study includes working class respondents, who are educated and employed in
service sector. It is inferred from the study that women even though educated, and employed, but
still they are financial dependent on others. They have average risk attitude and still unable to
take self decision on Investment, either the investment decisions are done by their parents or by
their spouse. Hence women have to be equipped with more financial information and they have
to be given financial freedom to make their investment choice. Indian women’s preference to
gold is not unusual and men prefer to invest in property – physical asset. Considering the risk
appetitive of women investment avenue education has to impart by financial institutions and
NGOs by announcing special schemes to encourage their investment behavior.
8. Future Work
The influence of marriage on gender is to be probed. A comparative study on married

men and women and unmarried men and women can be done. There is a need to conduct further
research on the relation between married women and selection of Investment Avenue. The
factors influencing their investment decisions post marriage can be studied in detailed. Similar
Investment study can be repeated among non-earning women and self-employed men and
women to understand their investment pattern.
9. References
1) Jianakoplos, Nancy A., and Alexandra Bernasek. 1998. Are women more risk averse? Economic
Inquiry 36:620-630.
2) Loibl, Cäzilia, and Tahira K. Hira. 2006. A workplace and gender-related perspective on
financial planning information sources and knowledge outcomes. Financial Services Review 15
(1):21-42.
3) Lalit Mohan Kathuria and Kanika Singhania (2012),” Investment Decision Making: A Gender-
Based Study of Private Sector Bank Employees”, The IUP Journal of Behavioral Finance, Vol.
IX, No. 56 1, 2012.
4) Mittal M and Vyas R K (2007), “Demographics and Investment Choice Among Indian Investors”,
The IUP Journal of Behavioral Finance, Vol. 4, No. 4, pp. 51-65.
5) Roszkowski M J and Grable J (2005), “Gender Stereotypes in Advisors’ Clinical Judgments of
Financial Risk Tolerance: Objects in the Mirror are Closer than they Appear”, Journal of
Behavioral Finance, Vol. 6, No. 4, pp. 181-191.
6) Singh J and Chander S (2006), “Investors’ Preference for Investment in Mutual Funds: An
Empirical Evidence”, The IUP Journal of Behavioral Finance, Vol. 3, No. 1, pp. 55-70.
7) Tahira Hira, Cäzilia Loibl, (2006) “Gender Differences in Investment Behavior” Milestone 3
Report.
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An empirical study on gender difference in the Investment pattern of retail

Investment Behaviour View project

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An empirical study on gender difference in the Investment pattern of retail

4. Analysis and Interpretation

Table No: 1 Gender and Risk Profile

Risk tolerance Profile

H2o: There is no significant association between gender and Characteristic of Investment

Table No: 2 Gender and Characteristic of Investment Avenues

Characteristic of Male Female

Table No: 3 Gender and Most preferred Investment Avenue

Gender Most preferred Investment avenue Total

Gender Age when first investment was made Total

Male No 35 117 58 17 7 2 236

Total No 82 205 78 30 8 2 405

Table No: 5 Gender and Annual Individual Income

Annual Individual Income

Gender 400001 500001 Total

H6o: There is no significant association between gender and Financial Dependency

Table No: 6 Gender and Financial Dependency

Gender Financial Dependency Total

Table No: 7 Gender and Borrowing habit to meet expenses

Gender Borrowing habit to meet expenses Total

Table No: 8 Gender and Encouraging factor for Investment

Encouraging factor for Investment

Free Urge Attractive Special

No 107 23 157 38 22 21 368

H9o: There is no significant association between gender and Household investment

Table No: 9 Gender and Household investment decision-maker

Gender Household investment decision-maker Total

Investment pattern in various Investment avenues

Table No: 11 Gender and Financial Information Source

6. Limitations of the Study

The influence of marriage on gender is to be probed. A comparative study on married

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