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 riskreturn 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
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 nonfinancial 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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.2
4. Analysis and Interpretation H1 o : There is no significant association between gender and risk profile of Individuals. Table No: 1 Gender and Risk Profile Gender Low Below Risk tolerance Profile 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% No 2 31 184 127 61 405 % 0.5% 7.7% 45.4% 31.4% 15.1% 100% 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. Value df Asymp. Sig. (2- sided) Pearson Chi-Square 18.765 a 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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.3
H2 o : 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 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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.4
H3 o : 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 Deposit Gold Property Insurance Shares PF/PPF Others Male No 59 45 72 31 16 7 6 236 % 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% No 94 104 118 44 28 9 8 405 % 23.2% 25.7% 29.1% 10.9% 6.9% 2.2% 2.0% 100% Value df Asymp. Sig. (2-sided) Pearson Chi-Square 15.802 a 6 0.015 Likelihood Ratio 15.920 6 0.014 Linear-by-Linear Association 2.592 1 0.107 N of Valid Cases 405 a. 3 cells (21.4%) have expected count less than 5. The minimum expected count is 3.34. 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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.5
H4 o : 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 <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% No 82 205 78 30 8 2 405 % 20.2% 50.6% 19.3% 7.4% 2.0% 0.5% 100% Value df Asymp. Sig. (2-sided) Pearson Chi-Square 20.893 a 5 0.001 Likelihood Ratio 22.438 5 0.000 Linear-by-Linear Association 13.554 1 0.000 N of Valid Cases 405 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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.6
H5 o : There is no significant association between gender and Annual Individual Income Table No: 5 Gender and Annual Individual Income Annual Individual Income Gender 0-100000 100001-200000 200001-300000 300001-400000 400001-500000 500001-600000 > 600000 Male No 13 62 55 28 27 19 32 236 % 5.5% 26.3% 23.3% 11.9% 11.4% 8.1% 13.6% 100% Female No 29 59 37 24 12 2 6 169 % 17.2% 34.9% 21.9% 14.2% 7.1% 1.2% 3.6% 100% No 42 121 92 52 39 21 38 405 % 10.4% 29.9% 22.7% 12.8% 9.6% 5.2% 9.4% 100% Value df Asymp. Sig. (2-sided) Pearson Chi-Square 37.255 a 6 0.000 Likelihood Ratio 40.399 6 0.000 Linear-by-Linear Association 31.257 1 0.000 N of Valid Cases 405 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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.7
H6 o : There is no significant association between gender and Financial Dependency Table No: 6 Gender and Financial Dependency Gender Financial Dependency 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% No 78 42 43 242 405 % 19.3% 10.4% 10.6% 59.8% 100% Value df Asymp. Sig. (2-sided) Pearson Chi-Square 20.857 a 3 0.000 Likelihood Ratio 22.882 3 0.000 Linear-by-Linear Association 4.213 1 0.040 N of Valid Cases 405 a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 17.53. 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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.8
H7 o : 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 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% No 13 28 101 111 110 363 % 3.6% 7.7% 27.8% 30.6% 30.3% 100% Value df Asymp. Sig. (2-sided) Pearson Chi-Square 14.416 a 4 0.006 Likelihood Ratio 14.716 4 0.005 Linear-by-Linear Association 9.990 1 0.002 N of Valid Cases 363 a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.26. 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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.9
H8 o : 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 Money to Interest Schemes/ are attractive Management available Save Rates Offers for No 72 12 82 26 11 16 219 Male % 32.9% 5.5% 37.4% 11.9% 5.0% 7.3% 100% Female No 35 11 75 12 11 5 149 % 23.5% 7.4% 50.3% 8.1% 7.4% 3.4% 100% No 107 23 157 38 22 21 368 % 29.1% 6.3% 42.7% 10.3% 6.0% 5.7% 100% Value df Asymp. Sig. (2-sided) Pearson Chi-Square 11.158 a 5 0.048 Likelihood Ratio 11.362 5 0.045 Linear-by-Linear Association.154 1 0.695 N of Valid Cases 368 a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.50. From the above table No: 8, it is inferred that the p value is 0.048 is lesser than 0.05, hence the null is rejected. Therefore there is significant relationship between gender and 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 Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.10
respondents have the urge to save for future is the major encouraging factor behind their Investment. H9 o : 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 Self Spouse Siblings Childre Parent In-Laws Male No 127 30 9 n 8 61 s 1 236 % 53.8% 12.7% 3.8% 3.4% 25.8% 0.4% 100% Female No 51 53 5 1 57 2 169 % 30.2% 31.4% 3.0% 0.6% 33.7% 1.2% 100% No 178 83 14 9 118 3 405 % 44.0% 20.5% 3.5% 2.2% 29.1% 0.7% 100% Value df Asymp. Sig. (2-sided) Pearson Chi-Square 35.774 a 5 0.000 Likelihood Ratio 36.670 5 0.000 Linear-by-Linear Association 6.282 1 0.012 N of Valid Cases 405 a. 3 cells (25.0%) have expected count less than 5. The minimum expected count is 1.25. From the above table No: 9, it is inferred that the p value is 0.000 is lesser than 0.05, hence the null is rejected. Therefore there is significant relationship between gender and Household investment decision-maker. It is evident that 53.8% of male respondents make selfdecision on all investment decisions, whereas 33.7% of female respondents have mentioned that their parents take all investment related decisions. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.11
Table No: 10 Investment pattern in various Investment avenues among men and women Gender Investment pattern in various Investment avenues 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 % 20% 17% 14% 20% 11% 16% 2% 100% 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 Financial Information Source Newspaper Friends Internet Family members Television Colleagues Financial advisor Magazine Mailer FM Radio Outdoor advertisement Others Gender Female Male No % No % No % 81 37% 51 34% 132 36% 75 34% 45 30% 120 33% 71 32% 31 21% 102 28% 55 25% 45 30% 100 27% 46 21% 29 20% 75 20% 28 13% 23 16% 51 14% 27 12% 21 14% 48 13% 33 15% 14 9% 47 13% 6 3% 5 3% 11 3% 3 1% 3 2% 6 2% 4 2% 1 1% 5 1% 3 1% 0 0% 3 1% 219 100% 148 100% 367 100% Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.12
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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.13
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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.14
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. Aano bhadraa krathavo yanthu vishwathaha -"Let the noble thoughts come to all from all directions". Page No.15