Optimism and Self-Control : Complementary Predictors of Financial Risk-Taking Propensity Among Working Adults

Authors

  •   Crystal Glenda Rodrigues Research Scholar, National Institute of Technology Karnataka, Surathkal, NH - 66, Srinivasnagar, Mangalore - 575 025, Karnataka
  •   Gopalakrishna B. V. Assistant Professor, National Institute of Technology Karnataka, Surathkal, NH - 66, Srinivasnagar, Mangalore - 575 025, Karnataka

DOI:

https://doi.org/10.17010/ijf/2023/v17i7/170966

Keywords:

behavioral finance

, optimism, self-control, financial risk-taking, gender study

JEL Classification Codes

, D14, D91, G11, G41

Paper Submission Date

, July 30, 2022, Paper sent back for Revision, June 14, 2023, Paper Acceptance Date, June 26, Paper Published Online, July 15, 2023

Abstract

Purpose : The article aimed to investigate the complementary strength of two behavioral traits, namely, optimism and self-control, on the financial risk-taking propensity of working adults in India. In addition, the moderating effect of gender on the relationship of optimism and self-control with financial risk-taking propensity was examined.

Methodology : The study adopted a cross-sectional-based survey approach with a sample consisting of 522 individuals of age 18 and above with diverse demographic characteristics. Purposive and convenience sampling techniques were employed for collecting data through a self-administered questionnaire. Structural equation modeling (SEM) was used to test the study’s hypotheses using the IBM AMOS software.

Findings : The results revealed a positive association between optimism and financial risk-taking, while self-control showed a negative association. Further, the relationship between optimism and risk-taking propensity was moderated by gender, and this relationship was more pronounced among females. The study also revealed a contradictory finding which showed greater levels of optimism among females compared to males as opposed to prior research findings.

Practical Implications : The study finds its importance among academicians who want to explore the complementary strengths of optimism and self-control in various other decision-making contexts. Financial service providers can look into the behavioral traits of optimism and self-control of their clients while assisting them in making financial decisions.

Originality : The present study is unique as optimism and self-control as complementary predictors of the financial risk-taking propensity of working individuals have not been explored in the Indian context.

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Published

2023-07-01

How to Cite

Glenda Rodrigues, C., & B. V., G. (2023). Optimism and Self-Control : Complementary Predictors of Financial Risk-Taking Propensity Among Working Adults. Indian Journal of Finance, 17(7), 8–24. https://doi.org/10.17010/ijf/2023/v17i7/170966

Issue

Volume 17, Issue 7, July 2023

Section

Articles
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