CHAPTER 3

RESEARCH METHODOLOGY

3.1 INTRODUCTION

The research methodology refers to the structured procedure employed to collect, analyze,
and decipher data with the aim of addressing research inquiries or exploring a particular subject. It
encompasses the comprehensive structure and strategy embraced by researchers to carry out their
investigations, ensuring that the research is thorough, credible, and dependable. The role of research
methodology is paramount as it provides guidance to researchers throughout the entire research
process, starting from establishing research objectives and designing the study, to gathering and
scrutinizing data, and ultimately, deriving significant conclusions.

3.2 RESEARCH DESIGN

Research Question: Determine a clear research question that addresses the relationship
between family financial socialization and financial literacy.

Respondents Selection: The respondents were 52 post-graduation students with a major in

one of the following streams: Finance, HR, Marketing, Operations, Analytics. Respondents’
mean age was 24.19 years. Among them, 55.8% (n = 29) were male and 44.2% (n = 23) were
female.

Survey Development: Develop a comprehensive survey questionnaire that measures both

family financial socialization and financial literacy. The survey should include questions
about participants “Parents behaviour, Parents teaching, Perceived Behavioural Control,
Relevant Hazard Experience, Financial Attitude, Perceived Hazard characteristics, Financial
Literacy”

Data Collection: Administer the survey to the selected participants. This is done through
online platform google form

Data Analysis: We analysed the survey responses to examine the relationship between family
financial socialization and financial literacy. Utilizing statistical techniques such as multi
variant regression analysis to identify patterns, associations, and potential causal relationships
HYPOTHESIS
A hypothesis is a statement or assumption that is proposed and tested in order to
explain a specific phenomenon or make predictions about a particular situation. It serves
as a tentative explanation that can be investigated and supported or rejected through
empirical research and data analysis.
A hypothesis typically consists of two components:
Null Hypothesis (H₀): This is the default or initial assumption that there is no significant
relationship, effect, or difference between variables or groups. It suggests that any
observed differences or associations in the data are due to random chance or sampling
variability.
Alternative Hypothesis (H₁ or Ha): This is the opposite or alternative to the null
hypothesis. It proposes that there is indeed a significant relationship, effect, or difference
between variables or groups, and that the observed data is not solely the result of chance.

In the context of data analysis, a hypothesis guides the statistical testing process.
Statistical tests are used to analyse the data and determine whether the evidence supports
the alternative hypothesis or if it favors the null hypothesis. In our research, we set
different hypothesis considering
Relevant Hazard Experience vs Perceived Hazard characteristics

Ho - There is no significant relationship between Relevant Hazard Experience and Perceived

Hazard characteristics

H1 - There is a significant relationship between Relevant Hazard Experience and Perceived

Hazard characteristics

Perceived Hazard characteristics vs Financial Literacy

Ho - There is no significant relationship between Perceived Hazard characteristics and

Financial Literacy
H1 - There is a significant relationship between Perceived Hazard characteristics and
Financial Literacy
Perceived Behavioural Control, Relevant Hazard Experience, Financial Attitude vs
Financial Literacy
Ho - There is no significant difference between Perceived Behavioural Control, Relevant Hazard
Experience, Financial Attitude and Financial Literacy
H1 - There is a significant difference between Perceived Behavioural Control, Relevant Hazard
Experience, Financial Attitude and Financial Literacy

Parents behaviour questions scale

Do your parents save money each month for the future? 0-5

Do your parents invest for long-term financial goals regularly? 0-5

Do your parents spend within the budget? 0-5

Are your parents engaged in tracking expenses for each month? 0-5

Do your parents pay credit card balances regularly? 0-5

Table-3.1 Questionnaire for parents behaviour

Parents teaching Scale

Do your parents teach you how to use a credit card 0-5
appropriately?

Do your parents speak to you about the importance of saving? 0-5

Do your parents discuss with you how to establish a good credit rating? 0-5

Table-3.2 Questionnaire for parents teaching

Perceived Behavioural Control

Suppose you had Rs.100 in a savings account and the interest rate was 2% per year. After 5
years, how much do you think you would have in the account if you left the money to
grow?

Suppose you had Rs.100 in a savings account and the interest rate is 20% per year and you
never withdraw money or interest payments. After 5 years, how much would you have on
this account in total?

Imagine that the interest rate on your savings account was 1% per year and inflation was
2% per year. After 1 year, how much would you be able to buy with the money in this
account?
Which of the following statements describes the main function of the stock market?

Considering a long time period (for example 10 or 20 years), which asset normally gives
the highest return?

Normally, which asset displays the highest fluctuations over time?

Table-3.3 Questionnaire for Perceived Behavioural Control

Relevant Hazard Experience Scale

When it comes to managing money is it hard to stick to the plans? 0-5

How difficult is it to find information about personal finance? 0-5

I don't know about personal Finance. 0-5

Table-3.4 Questionnaire for Relevant Hazard Experience

Financial Attitude Scale

How important to you is financial knowledge? 0-5

How serious are the impacts of managing money from financial knowledge? 0-5

How serious is the threat to you post by lack of financial knowledge 0-5

Table-3.5 Questionnaire for Financial Attitude

Perceived Hazard characteristics Scale

How Concerned do you feel about Financial Knowledge? 0-5

Table-3.6 Questionnaire for Perceived Hazard characteristics

Financial Literacy Scale

How confident do you feel about your ability to manage your own finances? 0-5

Rate the importance of spending less than your income 0-5

Table-3.7 Questionnaire for Financial Literacy