Indonesian Journal of Business Analytics (IJBA)
Vol. 3 No. 5 (2023): October 2023

The Impact of Financial Literacy, Overconfidence Bias, Herding Bias and Loss Aversion Bias on Investment Decision

Rafandito Mahendra Nugraha Prayudi (Univeristas Pembangunan Nasional “Veteran” Jawa Timur)
Eko Purwanto (Univeristas Pembangunan Nasional “Veteran” Jawa Timur)

Article Info

Publish Date
23 Oct 2023

Abstract

Investment decisions, aimed at securing long-term gains, are shaped by rational and irrational attitudes in capital allocation. Financial literacy gauges the rational stance, while behavioral finance dissects irrational inclinations. Behvioral finance includes overcondience bias, herding bia and loss aversion bias. This study scrutinizes how financial literacy, overconfidence bias, herding bias, and loss aversion bias sway investment choices for young Java Island investors. Simple random sampling is used, analyzed via Partial Least Square. Results indicate financial literacy lacks significant impact. Overconfidence boosts decisions, while high herding bias hampers them. Loss aversion bias, however, holds no sway on Java Island investors' decisions.

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Journal Info
Indonesian Journal of Business Analytics (IJBA)
Website

Abbrev

ijba

Publisher

PT FORMOSA CENDEKIA GLOBAL

Subject

Computer Science & IT Decision Sciences, Operations Research & Management Economics, Econometrics & Finance

Description

Indonesian Journal of Business Analytics (IJBA) is a peer-reviewed journal providing a space for both practitioners and academics for disseminating research results that work in Business Analytics and related fields. IJBA provides an outlet for the increasing flow of interdisciplinary research ...